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COVID drives huge variations in business performance

Author: ICAEW Insights

Published: 19 May 2021

The UK economy can be divided into three segments, depending on how businesses have coped with the pandemic, as Metro Bank’s local director in Cambridge explains.

The economy during the pandemic can be divided into three segments, according to George Neville-Jones, local director at Metro Bank in Cambridge: those businesses hardest hit, those busier than ever and the majority in between. There is a huge difference between the two ends of this spectrum: pubs, for example, have had to close for an extended length of time, while construction companies are flat out. 

Speaking ahead of his appearance as a panellist at ICAEW’s East of England Economic Summit, Neville-Jones said that many businesses fall in between these two extremes. They have had to fight for revenue and be agile in adversity. The government’s pandemic measures have provided an effective safety net to be accessed when necessary, and he has seen this through Metro Bank’s support for its business customers over the past year. Many of the bank’s business customers have asked for some sort of support, such as a CBILS or BBLS loan, with the BBLS in particular seeing high take-up.

“For quite a number of businesses these loans have been a lifeline and we’ve seen business owners being prudent, careful to maintain a reserve,” said Neville-Jones.

2020 saw many businesses put larger plans on hold: acquisitions, major investments and so on. These have returned strongly in 2021 with a great deal of activity reported by bankers, accountants and lawyers.

The lockdown in the first few months of 2021, while an unexpected blow to many companies, has not stopped entrepreneurs from moving forward with their plans. “We've seen quite a few businesses starting up because somebody has come out of a previous role or project. They've got savings in the bank, they’re moving on and they want to start something new.”

But what of those businesses worst hit by lockdowns? Pubs, restaurants and other hospitality businesses were forced to close for large parts of the last year. Some restaurants have been able to keep things going by launching take-away services. Others have even started delivering their own meal kits. While footfall has returned to those with outside seating as lockdown restrictions have eased, there are still challenges ahead for the sector. 

“It may be that pubs and restaurants benefit massively from the staycation environment, but equally it’s possible their location won't see footfall come back,” says Neville-Jones. “We just don't know how the economy is going to open up, but many of our customers are bullish about the next few months.”

Metro Bank has remained open throughout the pandemic and has been active in support of its business customers. Neville-Jones says. “The last twelve months have been incredibly challenging for all businesses. It has been a real pleasure to see so many of our customers being so entrepreneurial, adjusting to each new change as it comes through. Equally, many businesses have had a very tough year. It is very encouraging to see the economy opening up and our town centres getting busy again now.”

George Neville-Jones is part of the funding panel at ICAEW’s East of England Economic Summit. The summit runs from 8.30 to 10am on 25 May 2021 and you can find out more information or book via the link above.

ICAEW is also running a London and South East Economic Summit from 8.30 to 10am on 24 May 2021. 

Further resources:

COVID-19 challenges for business: BBLS repayments