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The Economic Impact of the COVID-19 Pandemic on Ceredigion Businesses and Self-employed

June 2024

Authors:

Aloysius Igboekwu

Aberystwyth University

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The Economic Impact of the

COVID-19 Pandemic on Ceredigion

Businesses and Self-employed

Dr Aloysius Igboekwu

Dr Sarah Lindop

Dr Maria Plotnikova

The Economic Impact of the COVID-19 Pandemic

on Ceredigion Businesses and Self-employed

This study was funded by Aberystwyth University

Authors:

Dr Aloysius Igboekwu

Dr Sarah Lindop

Dr Maria Plotnikova

The authors are grateful to Dr Sarah Clarke for excellent research assistance

and to a referee for useful comments.

Aliations:

1. Centre for Creativity, Leadership and Regional Economies and

2. Centre for Responsible Societies

Aberystwyth Business School

Aberystwyth University,

Aberystwyth,

Wales,

SY23 3DY,

United Kingdom

The Economic Impact of the COVID-19 Pandemic

on Ceredigion Businesses and Self-employed

1. Human capital includes knowledge, skills and experience that people accumulated throughout their working life.

Executive Summary

This study aims to investigate and understand

the economic impact of the COVID-19 pandemic

on businesses and the self-employed within

Ceredigion. Ceredigion is a rural County with key

industry sectors such as agriculture, hospitality,

tourism, retail, construction, manufacturing, civil

service, health and social care, creative arts/

entertainment, transport, telecommunication,

and education (including higher education). In

addition, non-governmental organisations and

charities have a major presence in the county.

One of the main differentiating characteristics

of Ceredigion is its large share of self-employed

businesses (13.5% in 2022) and small and micro

enterprises (91.8% in 2022).

On the 23rd of March 2020, the United Kingdom

government introduced various restrictions in

order to contain the spread of the COVID-19

virus. These restrictions included the closure of

places of work and worship, shops, businesses,

leisure centres, sports events, hotels and

restaurants, pubs, nightclubs, libraries, museums,

schools, and universities. Non-essential activities

(see Appendix 1), non-essential travel, and

tourist activities were temporarily suspended.

The containment measures, restrictions and

subsequent lockdowns had a negative impact

on the economy which resulted in direct costs

to businesses and the self-employed, affecting

revenue and proﬁtability, supply chains and

operations, and human capital1. The impacts

on business operations included: the closure

of business premises, reduced working hours

due to employees working around childcare or

other caring responsibilities or the necessity

of employees working from home during the

lockdowns (ONS, 2020a). At the start of the

closures and lockdowns, the future of the

economy looked pessimistic and the economic

situation in the country was expected to worsen

(ONS, 2020a).

In this study, we speciﬁcally investigated the

economic impact of the COVID-19 pandemic

on businesses and the self-employed within

Ceredigion. With lockdowns shutting down most

economic activities across the world and the

UK, there is no doubt that these measures had

a negative impact on businesses. The adverse

impact of business closures and lockdowns was

more pronounced in rural economies such as

Ceredigion (Mahmud and Riley, 2021, Walmsley

et al., 2020). This motivated a local level

study to evaluate the impact of the pandemic,

highlighting multi-level business vulnerabilities

resulting from the interplay of local factors such

as the local economy’s sectoral composition,

transmission patterns, and business types.

The main objective of this research project is

to examine the evidence and understand the

economic impact of the COVID-19 pandemic

and the lockdowns on businesses and the

self-employed in Ceredigion. The study seeks

to identify both the negative and positive

developments that occurred and how these

might help inform future policymaking. The

insights from this research will be useful to

policymakers to provide appropriate measures to

support the recovery of businesses. It is expected

that this report will be of value to the businesses

and the self-employed that operate within the

county and other similar counties across the UK.

This study is based on the survey of businesses

and the self-employed in Ceredigion and

informed by a review of related academic

literature and other studies carried out by

government agencies and non-governmental

organisations on the impact of the COVID-19

pandemic in the United Kingdom and other

countries in the world.

This research project explores how Ceredigion

businesses and the self-employed coped

during the COVID-19 pandemic. Ceredigion

businesses and the self-employed have reported

on their level of proﬁtability and revenue,

supply chain and operational issues, human

capital, government support schemes, digital

connectivity issues, and conﬁdence in the future.

These responses are explored in the main body

of the report.

We received a total of forty responses from

businesses and thirty-seven self-employed

businesses located in Ceredigion2. The responses

came through the online version of the survey,

which was hosted on both the Ceredigion County

Council and Aberystwyth University websites

and other social media outlets. During the

pandemic, the online platform was the quickest

and safest way of reaching businesses and the

self-employed hence our decision to conduct an

online survey.

A summary of the range of businesses surveyed

shows that: 10.5% of the businesses had only

been operational in the year prior to the March

2020 lockdown, 60.5% of businesses had been

operational since 2000, and 39.5% of businesses

had been established prior to the year 2000. 47%

of the business respondents were limited liability

companies. 62% of businesses surveyed were

run as sole proprietorships.The respondents

were from a wide range of industrial sectors.

The largest proportion was 32% in hospitality,

tourism, and the leisure sector, followed by

17% in retail, 12% in building and construction,

7% in manufacturing and transportation, 5% in

childcare, 5% in IT, 3% each in ﬁnancial services,

education and agriculture, and 2% each in

healthcare, legal, and the media industry.

Our ﬁndings show signiﬁcant changes in business

revenue, levels of external debt, changes in

demand and customer numbers and disruptions

to supply chains since the onset of the COVID-19

pandemic. Changing operations to comply with

government restrictions e.g., social distancing,

increased sanitisation and cleaning and staff

with caring responsibilities working from home

considerably changed the business environment.

In addition, the necessity to operate online led

to a marked increase in businesses having to

provide computing devices, internet connectivity

and digital accessibility for their operations.

The impact of COVID-19 on the revenue of

businesses surveyed was negative for over two-

thirds of the sample. 69% saw a fall in revenue

compared to 10.5% which saw a rise during

2. The self-employed businesses were surveyed in the socio-economic impact of the COVID-19 pandemic on Ceredigion households

survey, their responses are included in this report only.

the pandemic. The level of external debt rose

in 33% of businesses with 54% of businesses

reporting that ﬁnances ﬂuctuated during the

pandemic. 92% of businesses reported that they

had experienced diculties in various areas

of their business. The diculties were: supply

chain disruptions, a reduction in the number of

customers, a decline in cash ﬂow, an increase in

the number of business debtors, stang issues,

family circumstances, access to local markets,

and accessibility problems due to safe zones in

towns.

Focusing on the self-employed respondents to

the survey, 46% reported that business customers

had declined due to COVID-19 restrictions and

43% of self-employed businesses reported that

business revenue had declined due to reduced

demand for the products and services they

supplied, compared to 8% that reported a rise in

business revenue due to increased demand for

their products and services.

The outbreak of COVID-19 led to signiﬁcant

disruptions to the supply chain of businesses in

Ceredigion. 45% of businesses surveyed reported

varying degrees of disruptions to their supply

chains.5% of the self-employed respondents

were directly affected by shortages of supplies

needed to run their businesses. The impact

on supply chains and temporary closures of

businesses meant that many businesses had to

adopt new ways of working and adapt to the

needs of customers in a very short period of

time.

Among the businesses surveyed, 76% had

to change the way they operated due to the

introduction of new health and safety measures.

These included operating at reduced capacity to

allow for social distancing, frequent disinfecting

and cleaning of customer areas, adapting the

business to provide a takeaway service only,

moving the business online, altering shift patterns

for workers, and moving meetings online as some

employees continued to work from home. 47% of

businesses surveyed reported issues with digital

access and connectivity which included slow

broadband speed, poor mobile signal, lack of

digital skills and the cost of digital access. Moving

whole or part of the business online relies on

good infrastructure and digital connectivity.

3% of the businesses surveyed were impacted

by COVID-19 and had to close their business

permanently and 69% had to close their business

temporarily. After the initial shutdown and

closure of businesses the majority were able to

function in some capacity. 95% of businesses

in Ceredigion did not close permanently. 3% of

self-employed closed permanently while 35%

closed temporarily. The self-employed that

closed temporarily included those in hospitality,

creative arts, photo artist, retail, business

services, shopkeeping, photography, hairdressing,

general therapy, and property maintenance.

The pandemic had an adverse effect on human

capital which led to redundancies, reduced

working hours and changes in work patterns.

13% of businesses reported laying off staff due

to the pandemic. 41% of businesses reduced

their employees’ working hours, and 32% had

staff working from home. 34% of employees

across all businesses surveyed were caring for

children during the pandemic.Employees were

also self-isolating or on sick leave and in receipt

of company paid sick leave or Statutory Sick Pay

because of the pandemic. These redundancies,

changes to work patterns and staff shortages

due to illness or self-isolation had an indirect

negative impact on the businesses surveyed.

The government introduced a range of support

schemes in order to help businesses and the

self-employed. Among all the government

support schemes, the Coronavirus Job Retention

Scheme (Furlough) to help retain employees

during the pandemic and the Self-Employed

Income Support Scheme (SEISS) to support

the self-employed were the most utilised.

From the responses, other schemes applied for

included: Welsh government grants, Recovery

loans, Business rates grants scheme, Business

support grants, Non-domestic rates business

grant, Local Authority discretionary grants, Small

business grant, Start-up business COVID grant,

Coronavirus Business Interruption Loan Scheme

(CBILS), Bounce Back Loan Scheme (BBLS),

Government backed loans and the Economic

Resilience Fund.

In Ceredigion, 59% of businesses surveyed

registered for the government Furlough. Sole

traders and self-employed businesses were not

eligible for the scheme. Also, those businesses

3. See Appendix 2 for more information regarding SEISS eligibility criteria.

that did not have any employees or had not been

trading long enough were not eligible. Some

businesses continued trading throughout the

pandemic and maintained their pre-pandemic

stang levels without the support of Furlough.

These included businesses which had staff

working from home and those where sales

continued, albeit lower than in previous years

or saw sales increase due to the introduction of

new business lines.

Unlike the Furlough Scheme which was

implemented more expediently, the SEISS

scheme was implemented two months later. The

delay in setting up the scheme contributed to

the ﬁnancial hardship for small businesses and

the eligibility criteria left out several categories

of the self-employed. 27% of self-employed

businesses applied for the Government’s SEISS.

22% of the self-employed surveyed were eligible

and successful in their application for any

government self-employment business support

schemes. 76% of the self-employed respondents

reported that they were not eligible for any of the

government’s self-employment business support

schemes. These ﬁgures suggest that the eligibility

criteria3 ruled out some of the self-employed

from participating in these schemes.

The containment measures put in place

were successful in reducing the spread of

the COVID-19 virus and lessened the burden

on the NHS. Also, the government business

support schemes helped to alleviate some of

the adverse effects of the pandemic. However,

businesses and the self-employed suffered

because of the containment measures despite

the government’s support. For example, the

shutting down of economic activities during

the pandemic meant that revenues and proﬁts

were negatively affected by reduced demand

and the closure of businesses. Some businesses

had to take on additional debt in order to

survive. Also, lockdowns and other COVID-19

containment measures had a direct negative

impact on business operations and supply

chains. Staff were made redundant, some worked

from home, self-isolated due to infection, took

paid or unpaid sick leave, undertook home-

schooling or other caring responsibilities.

All these impacted negatively on businesses

through changes in working hours, work patterns

and employee responsibilities. The Furlough

Scheme and Self-Employed Income Support

Scheme helped to retain staff and to support

the self-employed. However, there were delays

in the implementation of the SEISS and several

categories of the self-employed were excluded

from the scheme based on eligibility criteria.

Finally, as with any survey-based data collection

method, caution needs to be exercised in

reading and interpreting the results of this study.

Businesses and the self-employed that were

impacted most by the pandemic might have

been preoccupied with their predicament and

were not motivated to participate in the survey.

That means that some of the worst impacts of

the pandemic on the businesses in Ceredigion

may not have been reﬂected in our results. Using

alternative data collection methods such as

focus groups was not possible due to COVID-19

pandemic restrictions.

Table of Contents

Executive Summary 4

Introduction 10

Background 10

Study Method 22

Questionnaire design 22

Data Collection 23

Results 25

Section 1: Revenue and Proﬁtability 25

Section 2: Supply chain and operational issues 27

Section 3: Human Capital 30

Section 4: Self-employment 31

Section 5: Government Support Schemes 32

Section 6: Access to the Internet and Digital Technology 35

Section 7: Business Vulnerability 36

Section 8: Moving Forward 38

Conclusions 40

References 42

Appendix 1: Non-Essential Shops 44

Appendix 2: SEISS Eligibility Criteria 45

Appendix 3: The Impact of COVID-19 in Ceredigion: Business Survey 47

Introduction

4. See the report titled “The Socio-economic Impacts of the COVID-19 Pandemic on Ceredigion Households” for more information.

The primary purpose of this study is to assess

the economic impact of the pandemic and

the multi-level increase in vulnerability on

businesses and the self-employed in Ceredigion.

Businesses and the self-employed in Ceredigion

faced varying degrees of economic challenges

and uncertainties since the COVID-19 outbreak

in March 2020. Both the pandemic and

containment measures and the restrictions that

followed had signiﬁcant effects on businesses

around the world. Within the United Kingdom,

businesses and the self-employed located in

different counties were affected differently.

This depended on the local economy’s sectoral

composition, transmission patterns, business

types, and skill sets.The containment measures,

restrictions and subsequent lockdowns that

reduced economic activities had a negative

impact on the economy and resulted in direct

costs to businesses and the self-employed,

affecting revenue and proﬁtability, supply chains

and operations, and human capital. As a result,

there was a multi-level increase in vulnerability

for the majority of businesses.

The survey questions were organised around

related themes established from evidence

in existing literature and studies conducted

elsewhere in the United Kingdom during the

COVID-19 pandemic. We received 40 responses

from Ceredigion businesses and 37 from the

self-employed. Originally, the self-employed

questionnaire was included in the Household

Survey, but their responses were combined with

the responses from businesses for analysis4.

This report consists of four key parts. The

ﬁrst part provides a brief background to

the study and reviews of closely related

literature. Additionally, it examines the current

understanding of the impact of the COVID-19

pandemic in the United Kingdom. The second

part discusses the study method which includes

questionnaire design and sampling procedure.

The analysis of our ﬁndings follows in part three,

and the discussion sections are organised around

the major themes of the study. The conclusions

derived from the analysis of the responses and

future policy suggestions for central and local

governments form the ﬁnal part of the report. A

copy of the survey questionnaire is included in

Appendix 3.

Background

The coronavirus (SARS-CoV-2) otherwise known

as COVID-19, was ﬁrst reported in Wuhan, China,

in December 2019. By February 2020, the disease

had spread across the globe, including European

countries and the United Kingdom. Subsequently,

as the disease continued to spread globally, the

World Health Organisation (WHO) designated the

outbreak of SARS-CoV-2 a worldwide pandemic

on 11 March 2020 (WHO, 2020). However, it was

not until Monday, 23 March 2020, when the

United Kingdom government passed a stay-at-

home directive to all businesses and people in

the country that was intended to help curb the

spread of the virus across the UK.

Following the implementation of the stay-at-

home measures, UK businesses were worried

about the effect COVID-19 would have on their

proﬁtability as a result of reduced opening hours,

workplace closures and the work-from-home

directive. Other concerns included disruption

to operations, redundancies, working around

childcare or other caring responsibilities. The

self-employed were worried about not being

able to continue trading due to a fall in demand

for their services and hence declining revenues

(ONS, 2020a).

The impact of the COVID-19 pandemic and the

stay-at-home directive was felt across various

sectors and areas of the economy. The supply

chain of goods and services is one area in

which the adverse effects of the pandemic were

strongly felt (Aday and Aday, 2020). Businesses

changed the ways they operated, for example,

moving their business online or implementing

strict COVID-19 measures to allow for social

distancing. Many businesses and the self-

employed turned to the government for support

in order to remain operational.

Before looking at the impacts of the COVID-19

pandemic on Ceredigion businesses, the

next subsection looks at the background of

Ceredigion businesses in more detail.

Ceredigion businesses’ background

Ceredigion economy is dominated by SMEs.

Only 55 out of roughly 4500 total local units

of businesses in the county (1.2%) fall in the

“medium” category of having between 50 and

249 employees. Small enterprises employing 10

to 49 people comprise 10.5% of the total with

the rest (88%) being “micro”-sized businesses

employing 0 to 9 people5. As can be seen

5. An enterprise can have several local units such as branches of a department store.

from Table 1, SMEs form a higher share of the

economy in Ceredigion than in Wales on average.

During the last decade, Ceredigion experienced

negative growth in the number of enterprises and

local units; their numbers declined every year

except between 2014 and 2017 (Figure 1). This

is in sharp contrast to the ﬁgures for Wales and

Great Britain where the number of enterprises

increased every year between 2011-2021. It

should be noted that growth was positive in

Ceredigion in 2021-2022.

One of the key differentiating factors of

Ceredigion County is its high share of self-

Enterprises Ceredigion

(numbers)

Ceredigion

(%)

Wales

(numbers)

Wales (%)

Micro 3650 92.1 94600 89.4

Small 290 7.3 9460 8.9

Medium 25 0.6 1470 1.4

Large 5 0.1 335 0.3

Total 3965 100 105855 100

Local Units

Micro 3985 88.5 107040 83.3

Small 460 10.2 17715 13.8

Medium 55 1.2 3300 2.6

Large 5 0.1 515 0.4

Total 4505 100 128570 100

Table 1: The Breakdown of Enterprises and Local Units by Size (2020)

Source: United Kingdom Business Counts (ONS, 2020c).

Ceredigion has a higher share of micro enterprises and local units than the Welsh average.

Jan 2004-Dec 2004

Jul 2004-Jun 2005

Jan 2005-Dec 2005

Jul 2005-Jun 2006

Jan 2006-Dec 2006

Jul 2006-Jun 2007

Jan 2007-Dec 2007

Jul 2007-Jun 2008

Jan 2008-Dec 2008

Jul 2008-Jun 2009

Jan 2009-Dec 2009

Jul 2009-Jun 2010

Jan 2010-Dec 2010

Jul 2010-Jun 2011

Jan 2011-Dec 2011

Jul 2011-Jun 2012

Jan 2012-Dec 2012

Jul 2012-Jun 2013

Jan 2013-Dec 2013

Jul 2013-Jun 2014

Jan 2014-Dec 2014

Jul 2014-Jun 2015

Jan 2015-Dec 2015

Jul 2015-Jun 2016

Jan 2016-Dec 2016

Jul 2016-Jun 2017

Jan 2017-Dec 2017

Jul 2017-Jun 2018

Jan 2018-Dec 2018

Jul 2018-Jun 2019

Jan 2019-Dec 2019

Jul 2019-Jun 2020

Jan 2020-Dec 2020

Jul 2020-Jun 2021

Jan 2021-Dec 2021

Percentage Share of Self-Employment in Total Employment

in Ceredigion, Wales and Great Britain, 2004-2021

Ceredigion Wales Great Britain

Figure 1: The percentage change in total local units in Ceredigion, Wales and Great Britain (2011-2022)

Source: United Kingdom Business Counts (ONS, 2020c).

Between 2010 and 2022, the annual percentage change in the number of local units in Ceredigion was negative for most of the

years. There was a sharp increase between 2014 and 2016, an increase between 2016 and 2017 and from 2021 to early 2022.

The Ceredigion trend follows the Welsh and Great Britain trends, albeit at lower levels but the trend reversed between 2021 and

2022. The Great Britain data includes Wales.

-2

2011

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Percentage change in local enterprise units in Ceredigion,

Wales and Great Britain, 2011-2022

Ceredigion Wales Great Britain

Figure 2: Percent share of self-employment in total employment for Ceredigion, Wales and Great

Britain for the years 2004-2021

Source: ONS Annual Population Survey (2022)..

The percentage share of self-employed businesses in Ceredigion is higher than the Wales and Great Britain average. There is

instability in the share of self-employed businesses in Ceredigion between 2004 and 2021 with a decrease after the pandemic began.

employed businesses. Figure 2 shows the

percentage share of self-employed businesses in

Ceredigion compared to Wales and the United

Kingdom between years 2004 and 2021.

The decrease in the number of self-employed

in the local economy during the pandemic

coincides with an increase in the number of

employees (ONS, 2022). The ONS data and

commentary suggest that a number of the

self-employed moved to more ‘stable’ jobs

and became employees in other businesses or

reclassiﬁed themselves as employees in order to

take advantage of the Furlough Scheme (ONS,

2022).

Revenueand Proﬁtability

The pandemic resulted in falling sales, revenue

and proﬁt for many ﬁrms. Data from the

European Investment Bank Investment Survey

(EIBIS, 2021) revealed the shock felt by EU ﬁrms

due to the pandemic, with 49% of EU ﬁrms

suffering a drop in sales, compared to 21% which

experienced increased sales. Low (pre-crisis)

productivity was a strong predictor of lost sales,

and more digitally advanced ﬁrms proved to be

slightly more resilient during the pandemic. The

EIBIS (2021) noted the divide between faster

digitalising ﬁrms and those progressing more

slowly, with clear asymmetry emerging. EU ﬁrms

that had already implemented advanced digital

technologies were more likely to digitalise

further due to the pandemic, which made it even

harder for slow adopters (sleepwalking ﬁrms) to

catch up. Nearly half of the ﬁrms surveyed by the

EIBIS that had already implemented advanced

digital technologies said they increased their

digitalisation as a response to the pandemic,

only a third of less digitally advanced ﬁrms

said the same. Firms that are not advancing on

digitalisation tend to be less transformative,

innovative and productive and did not use the

pandemic as a reason to develop their product

portfolio and maintain or increase sales revenue

(EIBIS, 2021).

The ONS (2020b) noted that there was an

87% increase in proﬁt warnings in 2020 with

over three quarters of these citing COVID-19

as the reason, reﬂecting those businesses that

were affected the most by the impact of social

distancing on their demand and operations.

Private non-ﬁnancial corporations reduced their

payment of dividends by £51.7 billion in 2020

and total annual dividend payments reached an

eight-year low. The fall in dividend payments

in 2020 was more immediate and substantial

than the economic downturn in 2008. The Bank

of England (2020) ﬁnancial stability report

estimated a cash-ﬂow deﬁcit in the ﬁnancial

year ending 2021 of up to £180 billion, primarily

reﬂecting the shocks to turnover over this period.

The ONS (2020b) survey data suggested that

some industries were worst hit, particularly those

in the accommodation and food services, and

the arts, entertainment and recreation sectors.

However, the nominal fall in corporate proﬁts

was not as large as the fall in 2020 national

income. This is due to the ﬁnancial support that

was provided by the government to businesses.

Using data from 1.5 million German companies,

Dorr, Licht and Murmann (2022) show that it

was mainly smaller ﬁrms that experienced strong

ﬁnancial distress and would have gone bankrupt

without the government’s policy assistance.

Small ﬁrms suffered a signiﬁcant loss of sales (by

at least 25%) more often than medium-sized and

large ﬁrms. They were three times more likely to

see this loss in the manufacturing sector. Small

and micro ﬁrms across sectors were also twice as

likely to enter insolvency. Faced with declining

sales, 23% of ﬁrms revised future investment

plans downward, with only 3% planning to invest

more. The greater the loss of sales in 2020, the

less likely ﬁrms were to plan to invest more in

the coming year than in the last. This ﬁnding

is supported by the ONS (2020b) survey data

which reports a fall in capital expenditure over

2020, reﬂecting the adverse impact of COVID-19

restrictions on sales revenues and cash positions,

as well as the effects of increased uncertainty

around whether the changes in the level and

composition of demand would persist.

Reuschke et al (2020) found an immediate and

severe impact of the lockdown on the self-

employed. Approximately, one-half of the self-

employed lost more than 50% of their income.

Blundell, Machin and Ventura (2021) conducted

repeated surveys of the self-employed and

reported that the hours worked and incomes of

the self-employed decreased during the course

of the pandemic. According to the authors in

January 2021, 57% of surveyed self-employed

workers were earning less than £1,000 per month.

This was an increase from 31% in January 2020

and from 46% in August 2020.

Small and medium-sized enterprises (SMEs)

account for 50 per cent of the total revenue

generated by UK businesses and 44 per cent

of the country’s labour force (McKinsey, 2020).

The COVID-19 pandemic affected the economy

and the livelihoods of the people behind the

SMEs. McKinsey (2020) found that although

80% of the SMEs surveyed reported stable or

increasing revenue prior to the pandemic, 80%

found their revenues declined as a result of

the pandemic. Concerns were raised regarding

defaulting on loan repayments, retaining

employees, and sustainable supply chains and

the need to postpone growth projects. McKinsey

(2020) found that industries in the UK were

affected differently with logistics, construction

and agriculture being the most negatively

affected. Sectors such as ﬁnance, scientiﬁc

research, insurance and education were the least

affected.McKinsey (2020) predicted that a drop

in SME revenue would have a disproportionate

impact on SME survival with the survey results

showing that a drop in revenue by 10 to 30 per

cent would result in insolvency.

Figure 3 above is taken from the Bank of

England (2020b) survey evidence from the

decision maker’s panel6 in quarter 4 of 2020

6. The Decision Maker Panel (DMP) is a survey of Chief Financial Ocers from small, medium and large UK businesses.

and looks at a summary of the results of the

impact of COVID-19 on UK businesses, up until

November 2020. As highlighted in the graph,

COVID-19 had a large impact on UK businesses

conditions with continued expectations that

COVID-19 would impact sales, employment,

hours worked, investment and costs over the

next year. In the ﬁrst two quarters of 2020, sales,

investment and total hours worked all saw a

dramatic fall. Sales were approximately 30%

lower relative to pre-COVID-19 in 2020 quarter

2 and 17% lower than they otherwise would

have been in 2020 quarter 3. Employment was

8% lower and investment 24% lower. To add

to declining business conditions, there was an

increase in unit costs of around 7% in quarter

2 of 2020. This increase persisted throughout

the period examined, with no expectation that

these costs would substantially decline as

other business conditions improved. Further

improvements were expected in the ﬁrst half of

2021, such that sales were only expected to be

around 2% lower by 2021 Q2. Investment was

also expected to recover, but more slowly and by

less than sales (Bank of England, 2020b).

Figure 3: Expected impact of COVID-19 on sales, employment, hours worked, investment and costs in

UK businesses

Source: Bank of England (2020b) Impact of Covid-19 on UK businesses – evidence from the Decision Maker Panel in 2020

Q4 | Bank of England.

Supply Chain and Operational Issues

As lock downs came into effect, consumers

started to stock up on essential items resulting

in systemic demand shocks. Examples include

products such as toilet paper, hand sanitiser

and hand wash. It was feared that supply chains

would not be able to withstand the peaks in

demand. Whilst some supply chains were forced

to ramp up others were forced to shut down

because they could not cope with the demand

shock (Seifert and Markoff, 2020).

The COVID-19 pandemic highlighted the need

for companies to react and adapt quickly

to crisis and strengthen resilience in their

operations. Managing supply chains was a key

part of this risk management activity. During the

COVID-19 pandemic and subsequent lockdowns,

companies were faced with substantial

disruptions that included managing reduced

supplies and customer expectations.

Today’s supply chains are complex and making

changes involves considering contractual

obligations, tax and employment implications,

potential relocation costs, visa issues for staff

and entry requirements and force majeure

implications (Hedwall, 2020).Dolgui and Ivanov

(2021) studied the ripple effect concept in supply

chain disruptions and a stress factor in supply

chain resilience7. The COVID-19 pandemic

has caused ripple effects in the supply chains

and supply chain structural dynamics that

follow these effects led to impacts such as

lower revenues, delays in delivery of goods and

services, loss of market share and reputation

and adverse effects on the proﬁtability of ﬁrms

(Dolgui and Ivanov, 2021).

The over reliance on China as a low-cost producer of

goods and services caused supply chain disruptions

for companies, especially at the start of the pandemic

when China shut down in early 2020 (Wright and

Lee, 2020). This increased public awareness of the

geographical diversiﬁcation of supply chains.There

were disruptions to the availability of goods sourced

from China; both ﬁnished goods for sale and inputs

used in factories in developed markets.

7. The authors state that the ripple effect occurs when disruption is not localised in the supply chain but rather cascades down the

chain and impacts the performance of the entire supply chain.

8. Industry 4.0 technologies include, but are not limited to, additive manufacturing, artiﬁcial intelligence, big data and analytics,

blockchain, cloud, industrial internet of things, and simulation (Dalenogare et al., 2018; Bai et al., 2020).

9. For more details on the framework, please see https://onlinelibrary.wiley.com/doi/full/10.1111/emre.12449.

The agricultural and food supply chains were

some of the most disrupted by the COVID-19

pandemic. Aday and Aday (2020) document that

the COVID-19 pandemic had a negative impact

on the entire agriculture and food supply chain

from the farms to the consumers. The authors

observed that the pandemic adversely affected

various aspects of the supply chain, such as

food production, processing, distribution, and,

ultimately, demand. They argue that this is due

to the restrictions and measures introduced

by governments around the world to control

the spread of the COVID-19 virus. The authors

recommend that the supply chains be made

ﬂexible enough to lessen the disruptions and

challenges the sector faces. Sharma et al. (2020),

studying agricultural supply chains, identify

a number of agricultural supply chain risks

due to disruptions of the COVID-19 pandemic.

The authors’ ﬁndings reveal that demand and

supply risks, management and operational risks,

ﬁnancial and logistics risks, policy and regulatory

risks, and environmental risks have contributed

to various levels of disruptions depending on

the scope and scale of the organisation. Also,

the authors observed that adopting strategies

such as industry 4.0 technologies8, supply chain

collaborations, and shared responsibility are

helpful to lessen supply chain disruptions caused

by the COVID-19 pandemic.

Magableh (2021) looked at the disruptions to

the global supply chain caused by the COVID-19

pandemic. The author analyses the various

supply chain stages and phases to determine the

consequences, opportunities, and developments

due to the pandemic. The author argues that the

COVID-19 pandemic has caused a signiﬁcant

negative impact on global supply chain activities,

especially in the medical and food global supply

chains and that these impacts have compromised

both the integrity and the stability of the global

supply chain. Furthermore, the paper suggests

a COVID-19 supply chain framework to help

address any major future disruptions to the

global supply chain9.

Payne-Gifford et al (2022) explore the disruptive

impact of the COVID-19 pandemic on British

beef and sheep meat supply chains. The

study is based on the triangulation of farming

and industry news reports, submissions to

government COVID-19 enquiry and interviews

with industry experts. The authors ﬁnd that

livestock farming and farm services were not

as severely affected by the pandemic as other

downstream activities such as processing,

retailing, food service or consumer delivery

channels. However, the sudden closure of

hospitality and catering and the redirection of

supplies to the retail sector had a dramatic effect

on the primary and secondary processors of red

meat. From the authors’ assessment, there is an

inherent resilience in the British beef and sheep

meat industry supply chains as a result of the

traditional production cycles. The 12-36-month

production cycle operated by this industry

makes it resilient to an indirect disruption such

as the COVID-19 pandemic.

Another industry supply chain that suffered

as a result of the COVID-19 pandemic was

housebuilding and construction in general. In

their study, Tyfu Tai Cymru (part of Chartered

Institute of Housing (CIH) Cymru, 2021)

reported that 90% of respondent organisations

suffered from supply chain disruptions with

their housebuilding, maintenance or retroﬁtting

programmes. The study ﬁnds that access to

timber for building and construction saw the

highest drop during the pandemic. Also, the

authors ﬁnd that prices increased by 30% to 40%

for materials such as timber, steel, concrete, and

fencing. The respondents to the study believe

that price increases occurred mainly in the six

months leading up to August 2021.

The automobile industry did not escape the

adverse impact of the COVID-19 pandemic on

its supply chain. In March 2020, Volkswagen

suspended production across Europe,

including plants in Spain, Portugal and Slovakia

(Volkswagen, 2020). Factories in Italy suspended

production, and work stopped in Germany

and its other European plants for several

weeks.Volkswagen joined other automakers

in Europe in closing plants as a result of

the pandemic. Fiat Chrysler, Peugeot Group

and Renault announced the closure of 35

manufacturing facilities in total across Europe as

10. https://www.weforum.org/agenda/2020/06/ongoing-impact-covid-19-global-supply-chains

regional and national authorities imposed severe

restrictions on travel and public life (CNN, 2020).

Hedwall (2020) stated that “Over the past

decades, the discussion around optimizing

supply chains has focused primarily on cost

eciency and commercial best outcomes”.

However, as the COVID-19 pandemic has

shown, “future supply chains will need to begin

factoring resilience and adaptability into their

calculations10”.

Human Capital

Human Capital has been deﬁned as the stock

of skills and knowledge that directly impact

the production process (OECD, 2021). Human

capital is lost with the time spent away from

employment, education and training. During

the COVID-19 pandemic, schools and childcare

facilities were closed for extended periods and

many parents had to home-school their children.

Home-schooling and online schooling lasted

for many months in the UK, which disrupted the

process of knowledge and skill acquisition for

all age groups negatively affecting future human

capital available for economic activity.

The loss of knowledge and skills while people

are not employed, or when these skills are

underutilised due to underemployment or

inactivity, is much higher than when being at

work (OECD, 2020). Labour underutilisation

increased in 2020 in all OECD countries,

compared to 2019, resulting in a loss of

human capital. Labour underutilisation was

more pronounced in households with caring

responsibilities and those with children that

required home-schooling.

The literature identiﬁes negative effects of

the pandemic on human capital through the

following channels: mortality as a result of

the infection, morbidity, separation from work

because of increased caregiving, increased

unemployment, underemployment, dropping out

of the labour force and disruption to schooling

(OECD, 2021). The mortality effect can be

measured through ‘potential years of life lost’ -

a measure of premature mortality that attaches

more weight to deaths at younger ages. There

was a signiﬁcant loss of potential years of life

as a result of deaths in all age groups in the

pandemic. Pifarré i Arolas et al (2021) calculated

that 20.5 million years of life had been lost due

to COVID-19 by January 2021 in 81 countries

for which the mortality data was available. The

loss of the years of life deprived economies

and societies of human capital that would have

otherwise been used productively. In addition,

the effects of the so-called “long Covid” on

long-term health have negatively affected the

sufferer’s ability to work which resulted in

deterioration of human capital.

As a consequence of the pandemic and stay at

home orders, many businesses had staff working

from home with reduced working hours. Within

each occupation, there is considerable variation

in workers’ ability to work from home. This led

to changes in working patterns and behaviour.

Having to work from home has accelerated

the existing tendency towards ﬂexible work

arrangements.

Reasons for reduced working hours varied

from staff hours cut due to a reduction in

business revenue and a reduction in customers.

Additionally, staff working hours were reduced

as a result of staff being off sick, shielding or as

a result of staff self-isolating due to symptoms

of COVID-19 within the household. OECD (2020)

points out that the rise in labour underutilisation

from 2019 to 2020, for 32 OECD countries on

average, was almost ﬁve times higher than the

rise in unemployment over the same period. This

is because of a large increase in the share of

underemployed and marginally attached workers

as a result of the pandemic. The large increase in

labour market underutilisation underscores that

the loss of knowledge and skills stemming from

the COVID-19 pandemic affected more people

than those who are conventionally counted as

unemployed.

Many businesses, in particular the hospitality

and tourism industry, saw a spike in customers

during the summer months of 2020, once

restrictions were eased, and many had

issues recruiting enough staff. Across the UK

other businesses also saw a shortfall in staff

recruitment, in particular in agriculture and the

transport sectors, and had issues recruiting staff

members to carry out essential roles such as

milking, fruit and vegetable harvesting and the

recruitment of delivery drivers to deliver goods

and services across the UK. While these sectors

relied on short term and seasonal migration from

the EU, many European workers having returned

home to Europe were not coming back to the UK

(Paul, 2020).

Issues with staff recruitment and staff shortages

were exacerbated by older more vulnerable

staff members shielding or retiring during the

pandemic reducing the stock of human capital

speciﬁc to ﬁrms.

Government Business Support Schemes

To keep the economy from collapsing during

the COVID-19 pandemic government business

support schemes were introduced to counter

business closures and to retain jobs throughout

the lockdown and beyond. The government

implemented the Coronavirus Job Retention

Scheme, which involved putting staff on

Furlough if they were unable to continue working

during the pandemic. Businesses could put staff

on Furlough and claim for employees who were

taxed by pay-as-you-earn (PAYE). Employees

could be on any type of employment contract,

including full-time, part-time, with an agency,

ﬂexible or zero-hours contracts. It was the

responsibility of the employer to apply for the

Furlough scheme on behalf of its employees as

they could not apply for this scheme themselves.

The Coronavirus Job Retention Scheme came to

an end on 30 September 2021.

McKinsey (2020)found that by April/May 2020,

50% of SMEs in the United Kingdom either

already had or were planning to take advantage

of the government’s Furlough Scheme. This

increased to more than 75% for enterprises with

more than ten employees.

Also, businesses were able to apply for

other types of government support schemes,

such as business rate relief, deferral of tax

payments, loans, and requested protection from

eviction from business premises.Government

support was crucial to the survival of

businesses.Calabrese et al (2022) ﬁnd that

two of the government’s COVID-19 ﬁnancing

support schemes – the Coronavirus Business

Interruption Loan Scheme (CBILS) and the

Bounce Back Loan Scheme (BBLS) were the

most utilised in supporting the ﬁnancing of UK

businesses. The authors ﬁnd that 92.1% of all

debt ﬁnancing during this period was backed by

the UK government compared to less than 5% in

pre-COVID-19 times. Also, the paper ﬁnds that

the government’s share of SME lending increased

from quarter 2 to quarter 3 of 2020 and micro

and small business had the highest demand for

loans.

Unlike the Furlough scheme that was

implemented more expediently, the SEISS

scheme was implemented later. The delay in

setting up the scheme contributed to ﬁnancial

hardship of small businesses. The SEISS was

announced by the government on 26 March

2020 and the ﬁrst grant opened for claims on

13 May 2020. A self-employed business was

assessed as either eligible or ineligible for the

scheme based on speciﬁc criteria. Businesses

were assessed using information provided in

their 2018 to 2019 self-assessment tax returns

for the ﬁrst three grants, and their 2019 to 2020

returns for the fourth and ﬁfth grants. Thus,

for the ﬁrst three rounds, those who became

self-employed from April 2019 were excluded

from the scheme - 0.2 million self-employed

fell within this category (National Audit Oce,

2020). Around 5.0 million individuals reported

self-employment income for the 2019/2020 tax

year. The scheme excluded those with annual

proﬁts of over £50,000 which amounted to some

0.2 million self-employed according to the 2020

National Audit Report. 0.5 million self-employed

individuals were ineligible because they were

making a loss or were company owner-managers

(directors of limited companies). 1.4 million were

ineligible because their trading proﬁt was less

than their non-trading income (National Audit

Oce, 2020).

Figure 4 shows the value of SEISS claims across

different sectors of the economy. By far, the

highest number of claims were made by the

construction industry. This is because the

building and construction sector has a high share

of self-employed and these were unable to work

from home during the lockdowns. A number

of sectors such as real estate, information

and communication had a very low claim rate

because the work in these sectors could largely

be carried out from home.

The average value for the ﬁrst claim was £2,900,

the average value for the second claim was

£2,500 and the third, fourth and ﬁfth round of

grants had an average value of £2,800 each.

HMRC (2021) reported that for the fourth

SEISS round, approximately two-thirds of the

potentially eligible population were males

(2.3m). The average claim for females was lower

at £2,200 compared to the average claim for

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Construction

Unknown and other

Transportation and storage

Other service activities

Administrative and support service activities

Professional, scientific and technical activities

Wholesale and retail trade; repair of motor vehicles…

Human health and social work activities

Arts, entertainment and recreation

Education

Accommodation and food service activities

Agriculture, forestry and fishing

Manufacturing

Financial and insurance activities

Information and communication

Real estate activities

Proportion of total value of claims in 5 rounds of SEISS by

industry sector

Figure 4: Proportion of total value of claims in 5 rounds of SEISS by industry sector

Source: HMRC, 2021.

The constructionsector recorded the highest monetary value of SEISS claims amongst industry sectors in the

United Kingdom.

males of £3,100 (HMRC, 2021).It is clear from

the disparity between the claims of males and

females that the self-employed businesses

owned by females were in sectors earning lower

proﬁts or in smaller businesses (females are

under-represented in the construction industry

which had highest value claims by sector). This

indicates that the self-employed females on

average received grants of lower value than their

male counterparts and faced higher ﬁnancial

vulnerability during the pandemic.

Figure 5 shows the uptake of the various rounds

of SEISS across Wales and its counties. The

ﬁgure indicates that SEISS 1 take-up was the

highest compared to the subsequent rounds.

Evidence suggests that the government support

schemes were crucial for businesses and the

self-employed, although the question of future

sustainability remains (Lambert and Van Reenen,

2021). The authors suggested that although

there were no substantial net business deaths in

2020 there was likely to be a build-up of at-risk

businesses that have been able to survive during

the pandemic and avoid closure by reliance on

government support schemes. A steep decline

in bankruptcies (including non-viable ﬁrms that

might have gone bankrupt without government

support) may jeopardise future productivity

(Fareed and Overvest, 2021).

Revoltella, Delanote, and Bending (2021) argue

that even with substantial policy support,

the impact of the COVID-19 pandemic on

the European economy was severe. This led

to questions at the time such as whether the

support measures enabled ﬁrms to adjust to

the emerging ‘new normal’ or whether they have

merely delayed problems, by keeping resources

tied up in what might otherwise be ‘zombie’

ﬁrms. Revoltella and Strauch (2021) stressed the

importance that viable and new ﬁrms needed

to have access to additional ﬁnancing (other

than debt ﬁnancing) to facilitate recovery post

pandemic. Incentives for the recapitalisation of

companies and access to equity or equity-type

ﬁnance became increasingly important. One of

the challenges for investors in the recovery was

to distinguish between viable and non-viable

ﬁrms. The number of undercapitalised viable

ﬁrms might increase signiﬁcantly post-crisis. As

proﬁts slumped, internal ﬁnance was constrained,

and ﬁrms depended on access to credit if they

wanted to invest. The resulting potential higher

leverage was a risk for investment during the

recovery period.

10%

20%

30%

40%

50%

60%

70%

80%

90%

Self-Employed Income Support scheme take-up by local

authority

Take-up rate for the first grant Take-up rate for the second grant

Take-up rate for the third grant Take-up rate for the fourth grant

Take-up rate for the fifth grant

Figure 5: Self-employment Income Support Scheme take-up in Wales

Source: HMRC, 2021.

The data shows the take-up of the ﬁfth round of SEISS in various Welsh local authorities (the lowest to highest). There was a low take-

up of SEISS in Ceredigion and the surrounding counties compared to other local authorities in Wales.

Agresti et al (2022) tracked business dynamism

during the COVID-19 pandemic looking at data

from 17 countries. The results show that ﬁrm

entry declined substantially in the ﬁrst months

of the COVID-19 pandemic, as few new ﬁrms

were established. At its trough (which was

April 2020 for most countries), the number

of new entrants per month had declined by

15%–80% compared to the same month in 2019.

However, starting in June 2020, entry generally

improved. Countries such as Australia, Belgium,

France, Norway, Singapore, the UK, and the US

experienced a ‘V-type’ rapid recovery, yet the

strength of the recovery displayed a substantial

degree of heterogeneity across these countries.

The rebound was suciently strong to offset the

losses in new ﬁrms entering the market since

the beginning of 2020. In some countries, total

entry rose signiﬁcantly in 2020 compared to

the previous year (e.g., in the UK and the US). In

most of these countries, entry continued to rise

signiﬁcantly in 2021 compared to 2019.

Firm entry and exit dynamics in Wales

Business demography data indicates that there

has not been a signiﬁcant net loss of ﬁrms in

Wales since the start of the pandemic. Firm exits

in Wales were below or on par with new ﬁrms

entering the market up to the second quarter

of 2021. This indicates positive net new ﬁrm

formation throughout this period; however, ﬁrm

exits outpaced ﬁrm entries from the second

quarter of 2021 (see Figure 6). This may reﬂect

withdrawal of the Furlough Scheme and the

SEISS prompting exits of non-viable businesses

(Lambert and Van Reenen, 2021). In addition,

in Wales there have been more ﬁrms’ entries

and more ﬁrm exits as compared to the pre-

pandemic period indicating a greater churn in

productive resources in the economy.

Unlike in Wales as a whole, more ﬁrms have been

closing in Ceredigion than new ﬁrms opening

at least from early 2017 when the data became

available (except for a brief period of quarter

four of 2019 recording a drop in ﬁrm exits).

Similar to the Wales ﬁgures, there was a higher

churn of ﬁrms during the pandemic with more

ﬁrm exits than entries (see Figure 7).

11. Non-essential retail refers to businesses that provide goods or services that are not considered essential to the general public.

https://www.eposnow.com/uk/resources/what-is-non-essential-retail. See Appendix 1 for more detail.

Digital Connectivity and E-commerce

Non-essential businesses11 were closed during

the COVID-19 pandemic, and this resulted in an

increased expansion of e-commerce ﬁrms. This

led to new product lines and a growing customer

base. This trend suggests a long-term shift of

e-commerce transactions from luxury goods

and services to everyday necessities (OECD,

2020). The OECD ﬁgures show that the COVID-19

pandemic has resulted in a dramatic increase in

the share of e-commerce when looking at total

retail sales.

The European Investment Bank Investment

Survey (EIBIS, 2021) data revealed the shock

felt by EU ﬁrms due to the pandemic and found

that more digitally advanced ﬁrms proved to

be slightly more resilient during the pandemic.

According to the EIBIS, 30% of European

manufacturing and service-sector SMEs said they

used the crisis as an opportunity to accelerate

planned transformation. 46% of EU ﬁrms said

that they had become more digital, and 34% of

less digitally advanced ﬁrms took the crisis as an

opportunity to start their digitalisation journey.

In the UK the share of e-commerce in retail rose

from 17.3% to 20.3% between the ﬁrst quarter

of 2018 and the ﬁrst quarter of 2020, and then

rose signiﬁcantly to 31.3% between the ﬁrst and

second quarters of 2020 (OECD, 2020). Those

businesses that could take advantage of this

shift and rise in e-commerce, provided their

customers with access to products from the

safety and convenience of their own homes.

Traditionally certain consumers (e.g., the elderly)

did not shop online, but the COVID-19 pandemic

has necessitated a change in their shopping

behaviour to complete a greater share of their

shopping online. This led to the expansion in the

scope of e-commerce. As a result, companies

that embraced e-commerce continued to trade

despite lockdowns and restrictive measures such

as social distancing. Some of these changes

in shopping behaviour may be long-lasting as

customers get used to new spending habits

and businesses take advantage of the changing

economic landscape (OECD, 2020).

Using data from three OECD countries (Australia,

New Zealand and the United Kingdom), Andrews,

Charlton and Moore (2021) ﬁnd that ﬁrms that

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

Q1 2017

Q2 2017

Q3 2017

Q4 2017

Q1 2018

Q2 2018

Q3 2018

Q4 2018

Q1 2019

Q2 2019

Q3 2019

Q4 2019

Q1 2020

Q2 2020

Q3 2020

Q4 2020

Q1 2021

Q2 2021

Q3 2021

Q4 2021

Q1 2022

Q2 2022

Q3 2023

Wales firm entries and exits, 2017-2022

firm entries firm exits

Figure 6: Count of Business entries and exits in Wales during the COVID-19 pandemic

Source: ONS Business Demography 2022 quarterly experimental statistics (ONS, 2020c).

There was a positive net new ﬁrm formation in Wales prior to the pandemic. However, exits were higher than

entries during the pandemic.

100

120

Ceredigion Firm entries and exits, 2017-2022

firm entries firm exits

Figure 7: Count of Business entries and exits in Ceredigion County during the COVID-19 pandemic

Source: ONS Business Demography 2022 quarterly experimental statistics (ONS, 2020c).

The negative net new ﬁrm formation has been exacerbated during the COVID-19 pandemic with ﬁrm exits by far

exceeding ﬁrm entries.

intensively use e-commerce or apps were more

resilient. The implication is that app usage by

customers may reﬂect a budding organisational

and technological capability, which helped

them to capitalise on new growth opportunities

induced by the pandemic. Thus, there is a strong

argument for technology adoption for enhanced

resilience (digitalisation of ﬁrms).

Established and more online diversiﬁed

companies had advantage over and above

smaller companies with less online presence

prior to the COVID-19 pandemic. Capriolo (2020)

looked at the number of Amazon businesses that

survived the COVID-19 pandemic, highlighting

how the crisis might have involved a shift in

demand from small and specialised sellers to

larger and diversiﬁed sellers. By April 2020

around 36% of merchants were inactive,

an increase from around 28% in February.

Particularly affected were sellers with less than

1,500 product listings (ASINs), while sellers with

over 3,000 listings saw positive upswings.

Not all companies were able to participate in

e-commerce activities and not all e-commerce

companies and products beneﬁtted from the

growth noted above. The sales of personal

protective equipment (PPE), IT equipment, and

groceries increased but demand dropped for

products related to travel, weddings, parties,

formal wear etc. Evidence shows that despite

the shift to e-commerce, a signiﬁcant number

of e-commerce retailers were facing the

same ﬁnancial repercussions of COVID-19 as

traditional high street retailers due to reduced

spending by consumers on non-essential items

(OECD, 2020).

Study Method

This study aims to investigate and understand

the economic impact of the COVID-19 pandemic

on businesses within Ceredigion County.

The research project covers ﬁrms in various

industrial sectors represented in the county

such as agriculture, tourism, hospitality, retail,

manufacturing, health and social care, charity

organisations, creative arts/entertainment,

transport, telecommunication, education, and

the public sector.

With most of the businesses either shut or

operating minimally during the lockdowns

between March 2020 and August 2021, collecting

research data from them to assess the impact

of the pandemic was always going to be a

challenge. Most businesses were likely to have

access to the internet and were able to complete

the survey so an online survey was the most

accessible to businesses, had a broad reach,

and was the most feasible option to collect data

under the prevailing circumstances. We needed

the most practical data collection method to

reach as many businesses as possible, including

those that might have shut down permanently.

A number of data collection methods were

considered including interviewing business

owners and senior management. However, the

online survey method was chosen to broaden

the coverage and reach of business respondents.

The questionnaire intended to capture the

characteristics of businesses in a rural county

impacted by the COVID-19 pandemic, the

subsequent lockdown, and restrictions.

The survey questionnaire was informed by

emerging literature on the topic and the themes

investigated were drawn from it. Government

restrictions and lockdowns affected businesses

causing some businesses to struggle with their

supply chains and operations management,

proﬁtability, access to loans and other forms of

credit, labour availability, and human capital.

To reﬂect the above, the questionnaire had

a set of questions to gather evidence about

business ﬁnancing, supply chain and operations

management, self-employment, human capital,

performance and proﬁtability, and moving

forwards towards recovery.

Questionnaire design

Below, we describe the design and development

of the questionnaire, data collection and the

response rate. The questionnaire consists of six

parts:

1. In part one, we asked respondents questions

about their business. This part collects

information about the industry sector, the

age of the business, type of business, whether

the business is in a rural or urban location,

diculties experienced during the pandemic,

risk of bankruptcy and whether the business

suffered temporary or permanent closures. The

information collected in this part is crucial to

our research as it provides evidence about the

diversity of businesses operating in Ceredigion.

Also, it highlights the needs of different

businesses in order to help them to recover from

the effects of the pandemic.

2. Part two gathers information about employment

and human resource issues. We asked the

respondents to provide information regarding

stang levels during the pandemic, the

government’s work-from-home directive and

its impact on businesses, redundancies due

to declining business activities, access to the

government’s Furlough Scheme, employees self-

isolating, changes in work patterns, and issues of

managing employee stress levels and well-being.

3. Part three analyses data regarding changes

in the business supply chain and its impact

on operations management. We asked the

respondents how the government’s directive

on containing the COVID-19 virus was

affecting the way they operated. Speciﬁcally,

we were interested in the changes in the type

of business, changes with the production

lines, suspension of production of certain

products, moving the business or part of the

business to online platforms, opening pop-up

shops in vacant business units, disruptions

in business supply chains, changes in the

cost of raw materials or inputs, and business

diversiﬁcation.

4. Part four focuses on business performance

and changes in proﬁtability. Respondents were

asked about changes in business revenue,

measures implemented by businesses to

improve customer conﬁdence, and access to

government’s support schemes. Respondents

were invited to suggest recommendations

as to how the business sector could be

stimulated, as well as suggestions regarding

policy support that the government could put

in place to help businesses recover.

5. Part ﬁve collects information about business

ﬁnancing. We asked respondents to provide

us with information regarding their main

sources of ﬁnancing, how often they took

bank loans and other forms of credit facilities,

whether they had applied for bank loans

successfully during the pandemic, changes in

the level of their ﬁrms’ external debt during

the pandemic, whether their business had

sought loan repayment holidays due to the

impact of the COVID-19 pandemic on their

revenue, the stability of their business revenue

during the pandemic, eligibility for any of the

government’s funding schemes, and whether

they were successful in securing these.

6. And ﬁnally, part six asks for additional

information not covered under the speciﬁc

topics in the ﬁrst ﬁve parts. In this part, we

asked businesses about digital and internet

connectivity issues they encountered during

the pandemic, whether they felt conﬁdent that

the economy would recover and whether life

would return to normal.

Data Collection

The survey was conducted through online

channels including the Ceredigion County

Council website, the Aberystwyth University

website, and other social media outlets of the

two organisations. Also, there was the option

for respondents to request paper copies of the

questionnaire. The survey was accompanied by

additional information explaining the rationale

behind the survey and the main objectives

to encourage businesses to participate.

Additionally, we embarked on publicity

campaigns using media, print, internet, and

electronic media channels to do this. Ceredigion

County Council facilitated the distribution of

the questionnaires and obtained data from

respondents on our behalf. The survey was made

available to all businesses and self-employed

in Ceredigion. The Survey period ran from April

to June 2021. The area covered by the survey

included both large towns and villages such

as Aberystwyth, Aberaeron, Borth, Cardigan,

Lampeter, Llanarth, Llandddewi Breﬁ, Llandysul,

Llanilar, Llanrhystud, Llanon, New Quay, and

Tregaron.

Sampling demography

The business survey was completed by 40

businesses in Ceredigion. Another set of

responses from 37 self-employed businesses

was added from the Household survey. 47%

of businesses who responded to this survey

were limited liability companies, and 64%

of businesses surveyed were run as sole

proprietorships. Whilst one business had been

established as early as 1902, 10.5% of the

businesses surveyed had only been up and

running in the year prior to the March 2020

lockdown. Twenty-three (60.5%) businesses had

been up and running since 2000, whilst ﬁfteen

(39.5%) businesses had been established prior to

the year 2000 (Figure 8).

1902

1971

1983

1985

1989

1990

1992

1997

1998

1999

2000

2001

2003

2004

2006

2007

2008

2009

2012

2016

2017

2018

2019

Number of Businesses

Yea r

Number of Ceredigion Businesses by year of establishment

Figure 8: Year business was established

Our sample data contains businesses that were established across various years. A large proportion of the businesses were

established since the 2000s.

Media

2% Transportation

Retail

17%

Manufacturing

Legal

Hospitality,

Tourism and

Leisure

32%

Healthcare

Financial services

Education

Childcare

Building and

construction

12%

Agriculture

INDUSTRY SECTOR

Figure 9: The distribution of industry sectors of the businesses surveyed

Businesses and the self-employed who

responded to this survey originated from a wide

range of industries. The largest proportion of

32% worked in the hospitality, tourism and the

leisure sector, whilst 17% worked in retail, and

12% worked in the building and construction

industry. 7% worked in either manufacturing or

in transportation, 5% in childcare, 5% in IT, 3%

worked in either the ﬁnancial services sector,

education, or agriculture, and 2% worked in

either healthcare, the legal sector, or the media

(Figure 9).

Results

This section presents the results of our survey and is split into eight sections. Section 1 focuses on

business revenue and proﬁtability. Section 2 focuses on business supply chains and operational

issues, Section 3 looks at human capital, Section 4 addresses the self-employed, Section 5 focuses

on government support schemes, Section 6 deals with access to the internet and digital connectivity,

Section 7 considers business vulnerabilities and Section 8 looks at the future and moving forward.

Results from our survey are highlighted and discussed.

Section 1: Revenue and Proﬁtability

In the early stages of the pandemic and in the

ﬁrst lockdown, all non-essential businesses

were shut down in Ceredigion. This included

hospitality and tourism businesses, the building

industry, arts and media, and the transport

sector. A wide range of businesses and services

in Ceredigion were suspended temporarily due

to the pandemic. All indoor businesses and

activities including bars, cafes and restaurants,

boat trips, retail sales, media industry, massage

therapy, coach hire, photography services,

swimming lessons, workshops and concerts,

wedding venues and large events, were

suspended. Businesses that provided essential

services that included agriculture and food

supply remained operational. Also, businesses

that were able to adapt to providing online

services continued to operate online. Those

that were not able to work online or were not

classiﬁed as essential had to temporarily close

their businesses. Many local food businesses

were able to adapt and provide online ordering

for customers, including take-away and food

delivery.

The impact of the closure of many non-essential

services had a substantial impact on the

revenue and income of businesses, including

those located in Ceredigion. According to this

survey 69% of Ceredigion businesses saw a fall

in business revenue during the pandemic. This

decrease was seen across a range of businesses,

but the biggest local impact was seen in

hospitality, tourism and leisure, and retail.

Other sectors which saw a decline in revenue

included transport, manufacturing, construction,

property maintenance, software development,

photography, mass media, motor industry,

childcare and insurance.

Of the 69% of businesses which reported

a decrease in their business revenue, the

percentage decrease ranged both within and

across sectors. A 10% decrease in business

revenue was seen in the insurance sector. A 25%

decrease was seen in software development and

the percentage decrease in business revenue

ranged from 25% to 70% in the retail sector. A

30% decrease was seen in manufacturing and

the motor trade, and the tourism sector saw

a decrease ranging from 30% to 75%. A 40%

reduction in revenue was seen by childcare

providers and the construction sector. Private

healthcare and beauticians experienced a 50%

decrease and in hospitality businesses there

was a decrease ranging from 50% to 90%. In

transport, including minibus/coach hire, there

was a 70% decrease and taxi companies saw a

100% decrease as they were unable to operate.

Businesses working in mass media (ﬁlming and

recording) experienced a 75% decrease, cafés

and leisure reported an 80% decrease and a 95%

reduction in revenue was seen by photography

businesses.

The level of external business debt rose for 33%

of the businesses. The impact of rising external

debt was seen in the hospitality and tourism

sectors, manufacturing and retail, minibus hire,

photography and the legal sector. As a result of

the pandemic, 15% of businesses had to apply

for a loan repayment holiday.

Business ﬁnances were also reported as

ﬂuctuating in 54% of businesses during the

pandemic. The hospitality and tourism sector,

retail, minibus and taxi hire, photography

and media, software development,

childcare,construction and property

maintenance, and private healthcare all saw

volatility in their ﬁnances. A small number

of Ceredigion businesses (10.5%) saw rising

revenue during the pandemic. These included

businesses in manufacturing, agriculture and

the building trade. An increase of up to 10%

was seen in agriculture and manufacturing

while an increase of up to 30% was seen in

construction. These increases in sales revenue

in the building industry could be attributed to

the escalating costs of raw materials, increasing

the value of sales but not necessarily increasing

sales volumes. 18% of businesses saw their

revenue unchanged. These included businesses

working in the following sectors: legal, retail,

hospitality, childcare, construction and the

building trade. 44% of local businesses reported

that their ﬁnances had remained stable during

the pandemic, including those that worked in

the hospitality, leisure and tourism sectors,

manufacturing and retail, the building trade,

agriculture, legal and insurance, transport, and

childcare. These businesses continued to operate

during the pandemic and/or made use of

government support schemes.

Despite the initial closures and impacts on

many businesses, no businesses surveyed in

Ceredigion had applied for bankruptcy as a

result of the pandemic at the time of this survey.

This could be due to the business government

support schemes which have kept them aﬂoat

during this period. Long-term survival of these

businesses without government ﬁnancial support

will depend on the prevailing macroeconomic

conditions and market forces.

Businesses surveyed were asked what their main

sources of ﬁnances were. They reported that

their ﬁnances had come from several sources

including bank loans, sales revenue, personal

ﬁnances and pensions, rent and marketing

revenue. While 62% of businesses surveyed did

not usually use bank loans or credit facilities,

36% used these facilities prior to the pandemic.

When asked if they had been able to apply for

a bank loan successfully during the pandemic,

34% answered in the armative while 51%

were unsuccessful. Out of the respondents

who usually apply for bank loans 16% were

unsuccessful in getting a loan during the

Percentage

Problems faced by Ceredigion Businesses

Figure 10: Types of problems faced by Ceredigion businesses

The most prevalent diculties included the fall in customer numbers, negative impacts resulting from the COVID-19

restrictions that were put in place to control the spread of the virus, declining cash ﬂow, an increase in business debtors

and disruptions to supply chains.

pandemic12. These included businesses in the

following sectors: agriculture, manufacturing,

transport, hospitality, and retail. Whilst 16% of

businesses that do not usually apply for bank

loans were successful and included those

working in tourism, leisure, retail, and hospitality.

Businesses surveyed were also asked if they

had experienced any diculties because of

the pandemic. Of the businesses surveyed 92%

faced diculties and the following responses

were noted as having the most impact during the

pandemic (Figure 10).

• 82% saw a reduction in the number of

customers due to the pandemic

12. Banks introduce stringent credit eligibility criteria during periods of economic and ﬁnancial crises.

• 74% experienced diculties due to the

COVID-19 restrictions

• 63% saw a fall in cash ﬂow

• 29% had issues relating to supply chains

• 11% saw an increase in the number of business

debtors

• 5% had issues with stang

• 3% had issues with access to markets

• 3% had access problems due to safe zones in

towns

• 3% had issues due to family circumstances.

Section 2: Supply chain and operational issues

Disruptions to business supply chains, as

a result of the outbreak of COVID-19, were

experienced by 45% of businesses surveyed

in Ceredigion. These disruptions were felt by

businesses operating in retail with items taking

a long time to arrive, signiﬁcant supplier delays,

and shortages of materials being experienced

by many businesses. The manufacturing sector

also experienced diculties obtaining products

and parts, whilst building and construction

saw delays to building projects due to building

material supply disruptions. The hospitality and

tourism sectors were unable to get essential

goods which were required for their business to

operate normally. Impacts were also seen locally

in the motor and transport sectors, as well as in

the arts and media industry.

45% of the businesses reported diculties

in getting parts and products. Suppliers were

working at reduced production capacity which

directly affected the running of local businesses

and their ability to get supplies. Retail business-

es noted that despite increase in demand for

products, it had not been possible to meet the

demand or maintain pre-pandemic service and

supply levels. Delivery companies had to reduce

their delivery personnel because of two-me-

ter distancing rules and staff shortages. Supply

chains were also impacted during the pandemic

due to travel restrictions when travel was only

allowed for essential purposes. One example of

this was the art sector as artists were unable to

pick up or drop off their work.

As well as businesses in Ceredigion seeing

delays to the supply of materials, businesses

working in hospitality and tourism, retail, and

building and construction also saw an increase

in the cost of raw materials. 69% of businesses

in our survey reported seeing an increase in

the cost of materials. Businesses in building

and construction saw the cost of materials go

up in some cases by 30%, as well as increased

delivery costs. These costs continued to be

impacted by shortages of delivery drivers

across the UK. Increased demand for building

and construction materials and services arose

during the pandemic due to home and garden

improvements.

Reasons behind increased costs along the

supply chain during this period are complex, as

there were other factors besides the pandemic

affecting costs including increased demand,

material shortages, international competition

for supplies, and the impact of Brexit. Further

impacts on businesses were felt as a direct result

of staff shortages. These shortages were due to

staff illness, staff self-isolating, staff working

from home and because of social distancing

measures which reduced the number of workers

that could share oce, factory or delivery spaces.

All these human factors directly and adversely

impacted supply chains (Figure 11).

With the impact on supply chains, and because

of temporary closures of businesses, some

adapted to new ways of operating and to the

needs of customers in a very short period. In this

survey businesses were asked if any changes to

the line of the business had been implemented,

due to the pandemic. 42% of businesses saw no

change and continued with their line of business.

13% of businesses said it was not possible to

change the line of business. This lack of ﬂexibility

had negative impacts on businesses. 8% of

businesses had moved to online platforms which

included developing their websites and providing

delivery services. 31% of businesses had reported

moving part or all their business online. 10% of

businesses considered moving their business

online, and 80% had not considered it which

included those that were already operating

online or their business model would not support

online platforms. New business lines were

created by approximately 20% of the businesses

in Ceredigion because of the pandemic. These

new business lines in the hospitality sector

included introducing an online delivery service,

increased takeaway packaging sales, the creation

of outdoor seating areas for bars, cafes and

restaurants and provision of accommodation for

essential workers. The retail sector introduced

the sale of face masks and PPE, with one

business creating and manufacturing a ‘special’

item to raise funds for NHS charities during

the pandemic. There was increased demand

for services that support working from home

such as broadband installations, repairs and

maintenance and generator installations and

repairs. When asked to consider future actions,

5% of businesses considered ’pop-up’ shops in

vacant units, and 18% considered diversifying

into other areas. Pop-up shops are used to give

small and new entrepreneurs the opportunity

to rent high street spaces and reach retail

customers for a short period of time. This

also ﬁlls vacant shops in the high street and

encourages customers to shop in town centres.

Operational issues

Under COVID-19 restrictions businesses faced

operational issues while struggling to ensure

they continued trading and that both their staff

and customers were safe. Many businesses went

above and beyond what was required, working

hard to help others in the community, keeping

staff employed, whilst putting in place measures

to improve customer conﬁdence. Many people

had become wary of shopping in high streets or

attending busy areas reducing customer footfall.

The introduction of new public health measures

and COVID-19 restrictions on businesses such

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Figure 11: Supply chain diculties faced by businesses during the COVID-19 pandemic shown as the

percentage of businesses in Ceredigion

as “social distancing” meant that businesses had

to change the way they operated. To comply

with government regulations and to encourage

customers to return to retail outlets, businesses

had to put in place a range of safety measures.

These included increased hygiene measures

such as supplying hand sanitisers, using face

masks indoors, deep cleaning sites and leaving

periods of no occupancy between guests, and

ensuring adequate ventilation was in place.

Other measures included the use of transparent

screens, signage for one-way systems and social

distancing measures to prevent the spread of the

virus. Some businesses moved meetings online.

Communication with customers moved online

via email and social media. Phoning customers

and providing newsletter updates increased

and businesses reported using more online

marketing. Others provided options for remote

contactless check-ins, which removed the need

for human contact as well as providing facilities

for remote bookings and payments and online

refunds were issued for cancelled holidays. All

the above-mentioned measures added extra

operational costs to the businesses, as well as

the additional resources required to meet the

COVID-19 safety regulations.

From the survey responses, 76% of local

businesses had to change the way they operated

due to the new public health measures that were

introduced. When respondents were asked what

impact the new health measures had on day-

to-day running of their business the following

responses were recorded (Figure 12).

One of the biggest impacts felt by businesses

had been the reduced capacity of customers

on their premises, due to the social distancing

measures that were put in place. Reduction in

customers, due to social distancing, was seen

by 52% of businesses. This led them to change

the way they operated. One-way zones had been

put in place, signage and safety zones were also

implemented. There was less seating capacity in

cafes, taxis, and boats, and “fewer people could

be accommodated in the studio”, all of which

had a negative impact on business revenue.

As well as social distancing measures, which had

been put in place, 28% of businesses reported

that premises and working areas were being

“thoroughly cleaned and disinfected between

customers and passengers”, “hand sanitizers

and face coverings were provided for staff and

customers”. “Temperature checks for staff and

customers” were implemented, and screen

shields were used between customers and staff.

In some cases, “windows remained wide open to

allow for fresh air to circulate, even during cold

winter months” and “extra time between clients

to allow for cleaning and airing the room” was

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Figure 12: Negative impacts on businesses due to new public health measures

taken. Many of these measures required extra

staff time, which further reduced the eciency

of the business operation and in turn affected

revenue.

28% of businesses had to adapt in a variety of

different ways including “providing a takeaway

service only”, and “moving sales online”, as a

result of the social distancing measures. For

example, businesses saw increased online sales

on their existing platforms and others set up

new online platforms. Further adaptations by

businesses included “altering shift patterns”

and having “less face-to-face meetings” and “a

move to increased remote working”. For example,

one business “had to move property during the

pandemic to cope with the change” and to allow

space to continue operating. A media business

reported that “when ﬁlming and recording we

had to keep group(s) far away from each other

and from the interviewee / actors, making

operating very dicult under the circumstances”.

21% of businesses reported that they had not

been able to operate as normal or had not

been able to operate at all. A business selling

postcards ceased trading, as “postcard display

stands had been removed from most shops” and

one business that relied on in-person activities

such as workshops and talks could no longer

operate this business model. Another business

stated that they were in “total lockdown due

to the vulnerability of staff”, the taxi trade had

“diculties socially isolating or distancing in a

taxi” and therefore could not operate at their full

capacity. For some trades work was put on hold

as customers were reluctant for tradesmen to

enter their property. A media company struggled

with “fewer commissions from broadcasters” and

the media company’s “failure to deliver programs

in the normal way”.

For many of these businesses implementing the

new public health measures such as constant

sanitisation and social distancing measures

had negative impacts on their operations and

business revenue.

Section 3: Human Capital

Human capital could be eroded through

reduced work hours, absence due to staff illness,

shielding, self-isolating, retirement, loss of

lives and business closure. In Ceredigion 69%

of businesses in this survey had to close their

business temporarily because of the COVID-19

pandemic, while only 26% of those surveyed

did not have to close and continued trading.

Businesses that were able to continue trading

included those in agriculture, manufacturing,

software development, legal services, retail,

childcare, plumbing and heating. After the initial

shutdown and closure, most businesses were

able to function in some capacity and 95% of

businesses surveyed did not close permanently.

However, 3% of businesses were impacted

by COVID-19 and closed permanently. These

closures had an impact on employees working in

these businesses and their human capital.

Although many businesses managed to maintain

the majority of their staff, working hours

were adversely impacted in some Ceredigion

businesses surveyed. 54% of local businesses

managed to maintain their staff normal working

hours. However, 41% of businesses had to reduce

the working hours of employees. The reasons for

reducing working hours varied from reducing

staff hours due to a reduction in business

revenue, a reduction in customers, and to

accommodate many working parents who were

working from home and looking after children.

Others noted a reduction in staff working hours

due to staff being off sick, staff shielding or staff

self-isolating due to COVID-19 symptoms within

the household.

Due to the pandemic UK residents were asked

to work from home where possible, and of

the Ceredigion businesses that responded to

this survey, 32% had staff working from home.

The businesses that did not have staff working

from home, included those which did not lend

themselves to home working, as well as some

which were sole proprietors and therefore did

not have employees. Businesses which reported

that they did not have employees working

from home included businesses working in

hospitality and tourism, retail, taxi and minibus

hire, building and construction, agriculture,

photography, motor trade, childcare, and private

healthcare. The majority of these businesses

had to suspend work for a period but were able

to continue to work in some capacity after the

initial lockdown.

32% of surveyed Ceredigion businesses were

able to operate with employees working from

home. Of these, 23% had one employee working

from home, 5% had two employees working

from home and 3% had 5 employees working

from home. The businesses who reported having

employees working from home, operated in the

following sectors: manufacturing, hospitality,

software development, legal, online retail, mass

media, plumbing and heating, insurance, and

tourism.

During the COVID-19 pandemic, schools and

childcare facilities were closed for extended

periods and many parents had to home-school

their children. Some parents and guardians were

also working from home during this time. The

survey showed that 34% of employees across all

businesses were caring for children during the

pandemic. Some employees with children were

able to continue working full-time from home,

whilst others had to cut working hours and work

part-time, if they were not put on Furlough.

29% of the businesses that employed staff

with children had registered for the Furlough

Scheme, and all had been successful with their

application to furlough staff. 16% of businesses

employing staff with children had reduced staff

working hours.

When businesses were asked if they had to

permanently lay off staff or make staff redundant

during the pandemic, 13% of businesses reported

having to lay off staff as a result of the COVID-19

pandemic. These included businesses in

hospitality and the legal sector. 5% of businesses

reported having employees on company paid

leave and employees from 18% of businesses

had to use some of their annual leave allowance

during the pandemic. 8% of businesses reported

having employees who were either self-isolating

or on company-paid sick leave, and these

businesses also had staff off on statutory sick

pay. 8% had staff self-isolating or on sick leave

without any sick pay, which included self-

employed businesses. Employees were also off

sick due to stress during the pandemic, without

any sick pay. One business noted that lack of a

staff member meant they were unable to operate

part of the business; “nobody to run part of (the)

business”, as some members of staff had been

off shielding or were unable to work.

Section 4: Self-employment

Section 4 discusses the responses of 37 self-

employed businesses who were asked about

the impacts of COVID-19 on their business in

the household survey. The following responses

were recorded as impacts on the self-employed

(Figure 13):

• 46% of self-employed reported that their

customers had declined due to COVID-19

restrictions. Those reporting a fall in

customers included businesses in candle

making, event management, hospitality, retail,

hairdressing, chemical supplies, business

services, project management, shopkeeping,

photography, mass media production, general

therapy, and property maintenance.

• 43% reported that business revenues had

declined due to reduced demand for

products and services they were supplying.

The self-employed that reported a decline

in revenue included those in tourism,

research consultancy, event management,

hospitality, arts, retail, business services,

software development, project management,

shopkeeping, photography, hairdressing,

general therapy, and property maintenance.

• 35% closed temporarily due to the pandemic

and included those in hospitality, arts, photo

artist, retail, business services, shopkeeping,

photography, hairdressing, general therapy,

and property maintenance.

• 8% reported a rise in business revenue due

to increased demand for their products

and services which included businesses in

candle making, media consulting, and project

management.

Percentage

Effects of COVID-19 on Self-employed Businesses

Figure 13: Effects of COVID-19 on self-employed businesses

• 5% needed access to work hubs away from

home due to problems working from home.

• 5% were directly affected by shortages of

supplies needed to run the business.

• 3% closed the business permanently because

of the COVID-19 pandemic.

Section 5: Government Support Schemes

In Ceredigion 59% of businesses surveyed

registered for the government Furlough Scheme.

Our survey results indicate that most of the

businesses that were not eligible to apply for

the Furlough Scheme were self-employed

or sole traders although some had applied

for alternative schemes including the self-

employment schemes. In some businesses staff

continued to work even though their businesses

faced other challenges such as a fall in sales

and customers. These included businesses in

the tourism sector which had staff working from

home, agriculture which remained operational

throughout the pandemic and software

development whose sales continued, albeit lower

than in previous years.

Some businesses that continued to operate

during the pandemic may not have fully utilised

the Furlough Scheme. They may have furloughed

some staff but not all if the business remained

operational. Essential staff to the operations

throughout the pandemic continued to work,

whilst other staff were furloughed. In Universities,

academic staff remained working from home,

providing lectures and support to students, while

some administration staff were put on furlough.

In addition to the Furlough Scheme a number

of other government funding schemes were

made available to businesses in Wales. Surveyed

businesses in Ceredigion that were eligible to

apply for the government funding schemes

applied to the following schemes: the Self-

Employment Income Support Scheme (SEISS) to

support and provide grants to the self-employed,

the Recovery Loans Scheme to support access

to ﬁnance as businesses recovered from the

Figure 14: Percentage of Ceredigion Businesses that secured government funding schemes

Percentage

Government Funding Secured by Ceredigion Businesses

£400 £4,000 £4,637 £10,000 £11,000 £15,000 £16,000 £20,000 £25,000 £50,000

Percentage

The amount of government funding received by Ceredigion

Businesses

Figure 15: The amount of government funds received by businesses in Ceredigion

impacts of COVID-19, the Business Rates Grants

Scheme to cover or reduce business rates.

Businesses in the survey also applied to the

Coronavirus Business Interruption Loan Scheme

(CBILS) and the Economic Resilience Fund. The

CBILS was designed to provide ﬁnancial support

to smaller businesses across the UK that were

losing revenue and had their cashﬂow disrupted.

The Economic Resilience Fund provided ﬁnancial

assistance to businesses that faced operational

and ﬁnancial challenges as a result of the

pandemic.

Ceredigion businesses were successful in

securing government funding schemes. Every

eligible business received one or more support

grant they applied for (Figure 14):

• 66% of eligible businesses received business

grants from the Welsh Government.

• 59% of eligible businesses placed their

employees on the Coronavirus Job retention

scheme (Furlough).

• 41% of eligible businesses took out

Government-backed accredited loans or

ﬁnance agreements.

• 38% were granted business rates holidays

• 38% of self-employed received SEISS funding

• 17% successfully deferred their VAT payments

• 7% participated in the HMRC Time to Pay

Scheme

From the respondents that secured government

funding, the amount of funds received ranged

from between £400 and £50,000 (Figure 15).

The average amount of funds received by the

respondents was £18,111.

Although 27% of the self-employed applied for

the government’s self-employment business

support schemes, 22% met the eligibility criteria

and were successful in their application. The

support schemes that were applied to included:

• SEISS (providing grants to self-employed

individuals)

• Small Business grants (providing support to

small and medium businesses)

• Small Business Capital grant (providing

support for new and existing small businesses

with their growth and/or recovery plans by

providing ﬁnancial contributions towards

capital expenditure)

• Local Authority discretionary grants (providing

support for small and micro businesses that

were not eligible for the Small Business Grant

Fund or the Retail, Leisure and Hospitality

Fund13)

13. In response to COVID-19, the government provided support for small businesses and businesses in the retail, hospitality and

leisure sectors. This support took the form of two grant funding schemes in the Financial Year 2020- 2021, the Small Business Grant

Fund and the Retail, Hospitality and Leisure Grant Fund. For more information on these grants, see: Small Business Grant Fund

(SBGF) and Retail, Hospitality and Leisure Grant Fund (RHLGF): guidance for local authorities (Version 6) (publishing.service.gov.uk).

• Non-Domestic Rates grants (designed to help

businesses with immediate cashﬂow problems

following lockdown

• Universal Credit for the self-employed

5% of self-employed businesses were successful

in securing all eligible grants they applied for

from the Welsh government. 8% were successful

in obtaining a Small Business grant, 8% were

awarded the Economic Resilience fund and 13%

reported getting the SEISS fund.

Section 6: Access to the Internet and Digital Technology

Internet connectivity and lack of digital skills

were seen as key issues faced by rural businesses

in Ceredigion. Many employers and their

employees had to cope with poor broadband

availability, while working from home, running

businesses or attending online meetings. This

often occurred alongside children having to

access learning content online. In a world where

businesses are heavily reliant on connecting

online, ranging from marketing products to

purchasing materials, online banking, and

online business or work meetings, the effect of

poor internet provision had a major negative

impact on the successful running of many local

businesses.

When asked if Ceredigion businesses had

experienced any digital connectivity issues

during the pandemic, 47% of businesses reported

issues with digital connectivity and digital access

(Figure 16).

The issues faced by local businesses included:

• a lack of reliable broadband or mobile options

(37%)

• slow broadband speed (29%)

• poor mobile signal (26%)

• lack of digital skills or access to training

schemes to improve digital knowledge (16%)

• the cost of access (13%)

Businesses in rural locations reported issues

with slow broadband speed or a lack of reliable

broadband signal. Businesses had problems

with staff working from home in rural locations

with poor connectivity and a lack of digital skills

and would have fared better if they had good

internet connectivity, had access to a decent

infrastructure and were more digitally aware

prior to the pandemic.

Percentage

Digital connectivity issues

Figure 16: Digital connectivity issues experienced by businesses in Ceredigion

Section 7: Business Vulnerability

14. The Household Report on the impact of the COVID-19 pandemic on the households in Ceredigion County is entitled “The Socio-

economic impact of the COVID-19 Pandemic on Households in Ceredigion County”.

Business vulnerability can be linked to the

impacts of the pandemic and lockdowns which

included issues related to public health and

safety measures, supply chains and operations,

decline in customer numbers, fall in business

cash ﬂows and revenues, access to ﬁnance and

credit facilities, and employment and human

resource problems. Business operations were

restricted due to public health measures adopted

during the pandemic. Smaller businesses were

at greater risk of not being able to operate

when staff members had COVID-19 or had to

self-isolate. Our survey responses underscored

the need for ﬁnancial support to be made

available for the self-employed especially those

who had family members shielding and had to

self-isolate. Moreover, the SEISS scheme was

introduced in May 2020, some two months

after the lockdown was announced. The Welsh

Government Economic Resilience Fund,

COVID-19 Non-domestic Rate Grant and Wales

Business Loan Scheme were introduced in April

2020 (Economic Intelligence Wales, 2022). As

detailed in the Household Report14, there was a

signiﬁcant increase in Universal Credit and other

welfare scheme recipients in the county and in

the UK in the ﬁrst quarter of 2020. After May

2020, the welfare recipient numbers stabilised

when the SEISS was introduced indicating that

some of the COVID-19 new Universal Credit

recipients were self-employed who switched to

SEISS after the scheme became available. The

SEISS scheme was criticised because it left out

a number of categories of the self-employed

such as the very recent self-employed businesses

(those who started trading from 2019 onwards)

and heads of businesses who paid themselves

out of dividends but did not take salaries.

Around 30% of SEISS claimants were women but

their claims were on average lower than those

of men (£2200 vs £3100 for the UK). Although

we recognise that women are underrepresented

in the construction sector which had both a

high number of claims and claims of a high

value, more research is needed to understand

what other factors were responsible for a lower

value of claims overall by women. Government

policy efforts should be directed at encouraging

women to set up businesses in sectors with high

proﬁtability. There is a need to provide extra

support to female self-employed businesses

post the COVID-19 pandemic. Also, we query

whether using the proﬁtability of a business as

the benchmark criterion for qualifying claims

was adequate, inclusive and equitable.

The outbreak of COVID-19 led to signiﬁcant

disruptions to the supply chain of businesses in

Ceredigion - disruptions were experienced by

45% of businesses surveyed. 5% of the self-

employed respondents were directly affected

by shortages of supplies needed to run the

business. Supply chain disruption such as

transport bottlenecks as well as increased input

costs rendered businesses unviable and led to

business closures. This was further exacerbated

by the delays at various points in the supply

chain such as shipping ports not working at

full capacity because of the impacts of the

pandemic. Deliveries of inventories and ﬁnished

goods were delayed and this had knock-on

effects on business customers and revenues.

Some of the indirect impacts of supply chain

disruption were that struggling businesses prior

to the pandemic were at a higher risk of going

bankrupt.

Furthermore, on the demand side there was a

decline in the purchasing capacity of customers

due to lower incomes of a substantial share of

the population during the pandemic. This led

to customers buying less of their pre-COVID-19

regular goods and focusing more on purchasing

essential items. Customers also changed their

shopping habits, purchasing more online. This

resulted in a fall in revenue for some businesses,

especially the high street shops. Some have now

closed as a result.

Capacity restrictions due to public health

measures also put businesses at risk of declining

customer numbers, customer satisfaction

and business revenue. Many businesses could

only provide service to a smaller number of

customers because of social distancing and the

others implemented safety measures such as

glass screens and one-way movement systems.

The survey responses indicated that several

businesses wanted to increase capacity. For

example, a bus company applied to carry more

passengers so it could remain sustainable.

As a result of lockdowns, social distancing,

capacity restrictions and other public health

measures, most businesses that responded to the

survey (82%) saw a reduction in the number of

customers, and more than half (63%) saw a fall in

cash ﬂow. In addition to this, 11% saw an increase

in the number of business debtors (i.e., they were

owed money by their customers). With sales

revenues declining many businesses applied for

bank loans to ﬁnance their operations. The level

of external debt rose in 33% of businesses. Of

the survey respondents who applied for bank

loans, only 50% were successful. The other

sources of ﬁnancial support were the Furlough

Scheme, SEISS and other pandemic-related

support grants. While many businesses resorted

to Furlough and other support schemes, as one

respondent business noted, “the grants have

been used but the customers haven’t returned”.

Together, these issues raise the question of

medium and long-term viability/sustainability of

SMEs in Ceredigion and in the wider economy.

It is expected that business vulnerabilities will be

some of the medium-long term impacts of the

COVID-19 pandemic. Therefore, organisations,

governments and government agencies must

be proactive to put in place appropriate policy

frameworks to tackle the impacts of the

COVID-19 pandemic in the months and years

ahead. Businesses may need to become more

innovative and change the way they do business

to survive and grow.

The recovery was hampered by labour shortages

particularly in the sectors that have shrunk

during the pandemic such as travel and

hospitality (Pizzinelli and Shibata, 2022). These

labour shortages existed alongside mismatch

unemployment when workers do not target jobs

in the sectors that were declining during the

pandemic. Job mismatches generate frictional

unemployment that hampers recovery. The

recovery took a longer time in high contact

sectors such as retail (ONS, 2022) and a high

number of Ceredigion businesses fall within this

category. Given that some of these businesses

have gone bankrupt and new ones have sprung

up, efforts need to be made to support the new

and existing businesses, so they remain viable.

In this vein, a more longer-term policy should be

put in place to support the recovery of the local

economy. This suggests that there is ’business

long-COVID’ that needs to be recognised

and addressed. The long-term effects of the

pandemic on businesses and the economy are

far-reaching and businesses should be consulted

in devising policy responses considering sector

and location speciﬁcities.

Our survey captured 5% of the businesses that

closed permanently due to the pandemic. It

is likely that the survey did not reach closed

businesses to the extent that would be

representative as they had less incentive to

complete the survey.

Section 8: Moving Forward

15. https://www.gov.uk/guidance/check-if-you-can-claim-the-job-retention-bonus-from-15-february-2021#:~:text=This%20

guidance%20was%20withdrawn%20on,Retention%20Bonus%20has%20been%20withdrawn.

Conﬁdence in the recovery of the economy

after the pandemic varied widely with 31% of

businesses feeling conﬁdent and 6% feeling

very conﬁdent that the economy would recover.

Businesses that felt conﬁdent included those

in hospitality, tourism, the building trade,

manufacturing, childcare, agriculture, and

transport. In contrast 28% did not feel conﬁdent

in the future recovery of the economy. This

included businesses in hospitality and leisure,

retail, manufacturing, the building trade,

photography and media, and legal services. 36%

were neutral or unsure about the economic

recovery (Figure 17a).

Similarly, 31% of businesses felt conﬁdent or very

conﬁdent about life returning to normal, 28%

were not conﬁdent and 31% felt neutral about a

return to normal in the near future. This showed

a great deal of uncertainty with the ongoing

situation and the future of the local as well as

the global economy (Figure 17b).

Respondents were asked if there were any new

schemes they would recommend to help their

business to recover following the pandemic.

A number of suggestions were noted including

further support/grants to cover business rates,

reduction in business rates, manufacturing

support, ﬁnancial assistance to aid recruitment,

and ‘bounce-back’ loans for businesses that re-

started trading when restrictions allowed. It was

noted that additional support was needed for

the hospitality and events sector as the grants

received were insucient to remain viable and

competitive. Additional ﬁnancial support was

needed for the retail sector as customers were

slow to return. There were problems accessing

high street shops faced by customers and

delivery vehicles. Respondents called for a more

comprehensive policy approach in designing

access, taking into account the need to get

customers to return to the high street and to

facilitate the delivery of supplies.

Further support for the self-employed was

suggested especially for those who had self-

isolated or had family members who shielded.

Also, a review of Universal Credit for the self-

employed was called for given that they were

at a greater risk of reduced income during the

lockdowns. Businesses that had developed the

digital side of their business called for further

support to expand and sustain their digital

capabilities.

Some respondents noted their dissatisfaction

with the withdrawal of the Job Retention Bonus,

which was a £1,000 one-off taxable payment to

the employer for each eligible employee that

was furloughed and kept continuously employed

until 31 January 2021. The Job Retention

Bonus was withdrawn after the extension of the

Furlough Scheme to March 2021 was announced

by the government on 5 November 202015.

Very confident Not confident Confident Neutral

Percentage

The level of confidence that the economy will return to

normal post-pandemic

Figure 17a: Conﬁdence in future recovery of the economy

Very confident Confident Neutral Not confident

Percentage

The level of confidence that life will return to

normal post-pandemic

Figure 17b: Conﬁdence that life will return to normal in the future

Conclusions

This report has highlighted the economic impact

of the COVID-19 pandemic on businesses and

the self-employed within Ceredigion. It has

identiﬁed the developments that occurred

due to the pandemic and this section outlines

how the lessons learned could help inform

policymaking to support the recovery of

businesses. Ceredigion businesses and the self-

employed reported on their level of revenue and

proﬁtability, supply chain and operational issues,

human capital, government support schemes,

digital connectivity issues, moving forward and

conﬁdence in the future.

From our ﬁndings, 69% of businesses surveyed

reported a fall in revenue, 33% saw levels of

external debts increase and 54% of businesses

reported ﬂuctuating ﬁnances. 3% of businesses

had to close their business permanently and 69%

had to close their business temporarily due to

COVID-19. 3% of the self-employed had to close

permanently and 35% closed temporarily due to

the pandemic.

Diculties faced by businesses included falling

customer numbers, decreasing demand, stang

challenges, changing operations to comply with

government restrictions, disruptions of supply

chains, declining cash ﬂow, access problems

due to safe zones in towns and moving business

operations online.

13% of businesses reported having to lay off

staff.From the survey results, 41% of businesses

had to reduce employee working hours. 45%

of the businesses surveyed reported problems

with their supply chain, with some of the self-

employed businesses affected mostly by lack of

supplies. 76% of the businesses had to change

the way they operated due to new health and

safety measures that were introduced. Changes

to operations included reducing capacity to

allow for social distancing, frequent disinfecting

and cleaning of customer areas, and adapting

the business to allow employees to work from

home.

The ability to move the business or part of the

business online required good infrastructure and

digital connectivity. 47% of businesses in the

survey reported issues with digital connectivity

and access, which included low broadband

speed, poor mobile signal, lack of digital skills

and cost of accessing digital infrastructure.

The government introduced a range of support

schemes in order to help businesses and the

self-employed, the most utilised of which was

the Furlough Scheme to help retain employees

during the pandemic and the SEISS to support

the self-employed. 59% of businesses surveyed

had registered for the Furlough Scheme and 27%

of the self-employed surveyed had applied for

the SEISS.

The outcome of this study shows that although

the support schemes put in place by the

government helped to alleviate some of the

adverse effects of the pandemic, Ceredigion

businesses and the self-employed have suffered

as a result of the public health containment

measures. The vulnerability section above

highlighted the business vulnerabilities that

could potentially arise as a result of the

COVID-19 pandemic. The self-employed whose

business got disrupted were part of the new

Universal Credit claimants. Their return to

productive jobs in the future was uncertain. It is

important to have a better understanding of how

the self-employed fared through the pandemic

and its aftermath in order to help them fully

realise their productive potential in local

economies. Assistance to re-start, expand or start

new businesses should be made available.

Ceredigion businesses and the self-employed were

asked for policy suggestions to help them recover

from the impacts of the pandemic. There was a

call for Ceredigion County Council to consult with

businesses to understand their problems, before

implementation of any schemes to support the

high streets and town centres. Town centres need

to be clean and accessible to encourage visitors

with free and ample parking. Local and UK tourism

needs to be encouraged so that visitors return to

Ceredigion towns. Grants should be made available

to businesses wanting to start-up or relocate

to town centres and funding made available to

repurpose vacant properties. Improved policies

are needed for protecting business tenants renting

properties, such as reduced rent or additional

ﬁnancial support including payment holidays.

There were a large number of comments

regarding business rates. Many called for a

review in order to support and reinvigorate

Ceredigion town centres and encourage new

businesses to set up in the high street. The

government could consider the implementation

or the continuation of tax cuts/ breaks including

VAT and Corporation Tax. The consensus from

the responses was that there needs to be a

continuation of ﬁnancial support from the

government for businesses affected by the

pandemic as customers have not returned

to allow for “business as usual”. Businesses

are struggling with the long-term effects of

COVID-19. In order to survive this ‘business long

COVID’, they will also need to adapt and change

their operations to become more innovative.

There were suggestions for Ceredigion County

Council to support businesses to increase their

capacity to allow them to be more viable and to

support growth (examples of these businesses

include a tourism boat and coach transport).

Hospitality and retail businesses requested

support to increase their digital capabilities, they

reported a lack of digital skills in the business

and a lack of training opportunities to improve

these skills.

Although governments tried to foster

e-commerce, regulations should not create

barriers to new business models that include

substantial e-commerce activity. Digital

connectivity issues such as consumer privacy and

protection need to be addressed to increase trust

and conﬁdence when transacting online. This

necessitates the development of consumer skills

to participate in e-commerce. Digital connectivity

issues were present before the pandemic, but

they have since been exacerbated by the impact

of COVID-19.

As discussed above and in the vulnerability

section the respondents of this survey noted that

further support is needed for the self-employed

who could not work during the pandemic or

whose income was reduced. It was suggested

that the Universal Credit payments for the self-

employed need to be reviewed.

The government should increase education

support to improve the quality of the workforce

by providing funded apprenticeships to assist

young people into employment. Funding

should be made available to support general

and mental health of employees to assist with

retaining human capital. Further assistance

was requested by the respondents for help

with childcare, increasing ﬁnancial support and

offering additional provision. The suggestions

included increasing the provision on the 30-

hour free childcare scheme. Respondents asked

for more support from the banking sector

which included free business banking, long-

term interest free loan schemes, repayment

holidays and extended bounce back loans. Some

businesses in the survey remained open to serve

their community during lockdown and felt ‘let

down’ by the government and the local council

both in terms of their efforts and contribution

not being acknowledged and the ﬁnancial

support they received. For example, one of the

respondents stated: “Policy should account for

and be adjusted for those very few independent

businesses that stayed operating through it

all....no acknowledgement from our regional or

national government for putting our community

before our personal and business needs......

We serviced all corners of Ceredigion, bringing

deliveries to those who were isolating or unable

to use their normal services. From March - May,

we lost £90k in turnover.....We reacted 100% to

the needs of our community and our staff.....We

stayed open to meet their needs and nothing

else.......The grants we received we were grateful

for, but they didn’t come close to covering what

the pandemic cost us”.

In summary, the responses to the survey indicate

that Ceredigion businesses and the self-employed

need further support. This includes those businesses

who temporarily closed during the pandemic and

those that remained open but were still adversely

affected. Most of the respondents’ comments refer

to continued ﬁnancial support, but it is also clear

that town centres and high streets in Ceredigion

need to be considered as a priority moving forward.

The banking sector could also assist businesses by

alleviating their ﬁnancial pressures by introducing

free business banking, repayment holidays, interest

free loans and extended bounce back loans.

What is clear from the responses in this report

is that more needs to be done to support local

businesses. Business has not returned to normal

and Ceredigion businesses and the self-employed

are still facing many challenges as a direct result

of the COVID-19 pandemic. It is hoped that the

outcomes of this report will help policymakers in

allocating resources to the most needed domains.

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Appendix 1: Non-Essential Shops

Covid-19: non-essential shops closed but not

exhaustive list

Accountancy Daily accessed 3 January 2023

Closures

The following shops and facilities had to close at

end of trading on 23 March 2020:

• all non-essential retail stores - including

clothing and electronics stores; hair, beauty

and nail salons; and outdoor and indoor

markets, excluding food markets;

• hotels, hostels, bed and breakfasts, campsites,

caravan parks, and boarding houses for

commercial/leisure use (excluding permanent

residents and key workers);

• indoor and outdoor leisure facilities such as

bowling alleys, arcades and soft play facilities;

• libraries, community centres, and youth

centres;

• communal places within parks, such as

playgrounds, sports courts and outdoor gyms;

and

• places of worship, except for funerals attended

by immediate families.

Takeaway and delivery services may remain open

and operational in line with guidance issued on

Friday 20 March 2020.

Online retail will remain open, and postal and

delivery services will run as normal.

Open list

The following retail outlets were allowed to

remain open:

• banks;

• bicycle shops;

• car rentals;

• chemists, pharmacies, health shops, including

non-dispensing pharmacies;

• corner shops;

• garages;

• home and hardware shops;

• laundrettes and dry cleaners;

• newsagents;

• pet shops;

• petrol stations;

• post oces; and

• supermarkets and other food shops.

There are also tight restrictions on the public’s

use of retail and public premises which are

permitted to remain open, which will be the

responsibility of retail owners.

The following measures were followed:

• ensure two meters between customers and

shop assistants.

• let people enter the shop only in small groups,

to ensure that spaces are not crowded; and

• queue control is required outside of shops and

other essential premises that remain open.

Appendix 2: SEISS Eligibility Criteria

The SEISS was announced on 26 March 2020 as

part of the UK government’s support package for

businesses and self-employed people during the

coronavirus (COVID-19) outbreak in early 2020.

The scheme was open to self-employed

individuals and members of a partnership who

met the following criteria:

• traded in the tax year 2018 to 2019 and

submitted their self-assessment tax return on

or before 23 April 2020 for that year

• traded in the tax year 2019 to 2020

• intended to continue to trade in the tax year

2020 to 2021

• carried on a trade which had been adversely

affected by COVID-19

A business could be adversely affected by

COVID-19 if for example:

• they were unable to work because they:

› were shielding

› were self-isolating

› were on sick leave because of COVID-19

› had caring responsibilities because of

COVID-19

• they had to scale down or temporarily stop

trading because:

› their supply chain had been interrupted

› they had fewer or no customers or clients

› their staff were unable to come in to work

The grant was not open to limited companies or

those operating a trade through a trust.

To work out eligibility, HMRC ﬁrst looked at the

2018 to 2019 Self Assessment tax return. Trading

proﬁts must have been between £0 and £50,000

and at least equal to non-trading income. If an

individual was not eligible based on the 2018

to 2019 Self Assessment tax return, HMRC then

looked at an average of the tax years 2016 to

2017, 2017 to 2018, and 2018 to 2019.

The scheme allowed an eligible individual to

claim a taxable grant worth 80% of three months’

average trading proﬁts, paid out in a single

instalment and capped at £7,500 in total.

The ﬁrst grant opened for claims 13 May 2020

and closed on 13 July 2020.

On the 17 August 2020 applications for the

second grant opened. This was a taxable grant

worth 70% of three months’ average trading

proﬁts, paid out in a single instalment and

capped at £6,570 in total. To be eligible the

individual’s business had to be adversely

affected due to COVID-19 on or after 14 July

2020. The second grant closed for claims on 19

October 2020.

On 30 November 2020 applications for the third

grant opened. This was a taxable grant worth

80% of three months’ average trading proﬁts,

paid out in a single instalment and capped at

£7,500 in total. The third grant closed for claims

on 29 January 2021.

To be eligible for the third grant an individual’s

business had to be impacted due to COVID-19

on or after 1 November 2020, and the individual

had to declare they intended to continue to trade

and either:

• were currently trading but were impacted by

reduced activity, capacity or demand due to

COVID-19

• were trading but were temporarily unable to

do so due to COVID-19

• had to also declare that they reasonably

believed that any reduced activity, capacity

or demand or inability to trade due to

coronavirus during the period 1 November

2020 to 29 January 2021, would result in a

signiﬁcant reduction in trading proﬁts for the

year those proﬁts were reported in, compared

to what they would otherwise expect to have

achieved

• that they intended to continue to trade

The government announced at Spring Budget

2021 that the SEISS would continue until

September 2021, with a fourth and a ﬁnal ﬁfth

grant.

For both the fourth and ﬁfth grants the income

rules remained unchanged, and the person had

to:

• carry on a trade the business of which had

been adversely affected due to COVID-19 in

the qualifying period (1 February to 30 April

2021 for the fourth grant)

• have carried on a trade in the tax years 2019 to

2020 and 2020 to 2021

• intended to continue to carry on a trade in the

tax year 2021 to 2022

• submitted their self-assessment tax return for

2019 to 2020 on or before 2 March 2021

On 22 April 2021 applications for the fourth

grant opened. The claims window closed on

1 June 2021. As with the previous grants

eligibility was based on a person’s tax returns for

either:

• the 2019 to 2020 tax year

• an average of the consecutive tax years 2016

to 2017, 2017 to 2018, 2018 to 2019, and 2019

to 2020, if a person was not eligible based on

2019 to 2020 alone

With the 2019 to 2020 tax year assessed for the

ﬁrst time, some individuals could claim a grant

that were previously unable to do so. These

individuals were either:

• newly self-employed, meaning the individual

started trading in 2019 to 2020 having not

traded in any of 2016 to 2017, 2017 to 2018 or

2018 to 2019

• previously ineligible based on their tax returns,

for example because their trading proﬁt was

less than their non-trading income

The fourth grant was a taxable grant based on

80% of 3 months’ average trading proﬁts, paid

out in a single instalment and capped at £7,500.

On 29 July 2021 applications for the ﬁfth

grant opened. The person’s business had to be

impacted due to COVID-19 in the qualifying

period (1 May 2021 to 30 September 2021). The

claims window closed on 30 September 2021.

This grant introduced 2 levels of grant based on

the reduction in turnover experienced between

an individual’s reference year (either 2018 to

2019 or 2019 to 2020) and their pandemic year

(a 12-month period starting between 1 April and

6 April 2021 inclusive). These 2 levels were either:

• a grant of 80% of 3 months’ average trading

proﬁts capped at £7,500 for those with a

turnover down by 30% or more

• a grant of 30% of 3 months’ average trading

proﬁts capped at £2,850 for those with a

turnover down by less than 30%

To be eligible for the higher grant, the

individual’s turnover must have fallen by 30%

or more between their reference year and the

pandemic year. Newly self-employed individuals

were not subject to the turnover test and could

claim the higher grant.

Source: Self-Employment Income Support

Scheme (SEISS) - GOV.UK (www.gov.uk).

Accessed on 9 May 2023.

Appendix 3: The Impact of COVID-19 in Ceredigion: Business Survey

Section 1: General Information

1. What year did your business start?

The value must be a number

2. What is your industry sector?

3. Is your business a limited liability company?

Yes

4. Is your business a sole proprietorship?

Yes

5. Which of the following best describes the

location of your business?

Countryside

Town

Village

6. Has your business closed temporarily because

of COVID-19 pandemic issues?

Yes

7. Has your business closed permanently

because of the adverse impact of the COVID- 19

pandemic?

Yes

8. Has your business applied for bankruptcy

because of COVID-19 pandemic issues?

Yes

9. Has your business experienced any diculties

because of COVID-19?

Yes

10. If you have answered ‘yes’ to question 9,

which of the reasons listed below applies to your

business? (Please select all appropriate options

from the list)

Restrictions due to the COVID-19 pandemic

Issues related to your supply chain

Fewer customers

Increase in the number of business debtors

Fall in cash ﬂow

Other

Section 2: Employment and Human

Resources

11. How many staff does your business employ?

The value must be a number

12. How many of your employees work from

home?

The value must be a number

13. Do your employees who work from home use

their own technology, e.g. computers?

Yes

14. Does your business provide technology, e.g.,

computers for employees who work from home?

Yes

15. Has your business laid off any of its

employees with a speciﬁc recall date?

Yes

16. Has your business laid off its employees with

the prospect of a recall?

Yes

17. Has your business permanently laid off or

made its employees redundant?

Yes

18. Has your business reduced its employees’

work hours?

Yes

19. Has your business registered for the

government’s furlough scheme? (Coronavirus

Job Retention Scheme)

Yes

20. If you answered ‘no’ to question 19, please

explain the reasons for this:

21. Was your business’ application for the

furlough scheme successful?

Yes

22. How many employees in your business

were put on the furlough scheme during the

COVID-19 pandemic?

The value must be a number

23. How many employees in your business were

put on company-paid leave during the COVID-19

pandemic?

The value must be a number

24. How many employees in your business

used their annual leave allowance during the

COVID-19 pandemic?

The value must be a number

25. How many employees in your business were

self-isolating or on company-paid sick leave

during the COVID-19 pandemic?

The value must be a number

26. How many employees in your business were

self-isolating or on statutory pay sick leave

during the COVID-19 pandemic?

The value must be a number

27. How many employees in your business were

self-isolating or on sick leave without sick pay

during the COVID-19 pandemic?

The value must be a number

28. How many employees in your business were

off-sick with stress because of the COVID-19

pandemic?

The value must be a number

29. How many employees in your business are

caring for children or others?

The value must be a number

30. Regarding the employees in your business

who are caring for children and others, please

tick which of these apply to them:

They are working

They are working part-time

They are working full-time

Section 3: Supply Chain and Operations

Management

31. Has the introduction of new public health

measures such as the ‘social distancing’ rule

changed the way your business operates?

Yes

32. If you answered ‘yes’ to question 31, please

explain the changes:

33. Has your line of business changed because

of the COVID-19 pandemic? (For example,

some distillery lines changed to hand sanitiser

production lines. Please list the business lines

that were discontinued because of the COVID-19

pandemic).

34. Please list the business lines that were

suspended temporarily because of the COVID-

19 pandemic.

35. Please list the new business lines that were

created because of the COVID-19 pandemic.

36. Has part, or all your business moved online?

Yes

37. Are you considering moving your business

online?

Yes

38. Are you considering opening ‘pop-up shops’

in vacant business units?

Yes

39. Are you considering diversifying your current

business to other areas?

Yes

40. Has the COVID-19 pandemic disrupted your

business supply chain?

Yes

41. If your answer to question 40 above is ‘yes’,

please explain how your business supply chain

been disrupted?

42. Can you give an estimate of how many

per cent your business supply chain has been

disrupted?

The value must be a number

43. Has the cost of raw materials or products

risen because of COVID-19 pandemic?

Yes

Section 4: Business Performance and

Proﬁtability

44. Has your business revenue changed during

the COVID-19 pandemic? Please select the

option that best describes your revenue situation

from the list below:

Increase

Decrease

Remains the same

45. If your answer to question 44 above is

“increase”, by what percentage has your

business revenue increased during COVID-19

pandemic?

The value must be a number

46. If your answer to question 44 above is

“decrease”, by what percentage has your

business revenue decreased during COVID-19

pandemic?

The value must be a number

47. What measures has your business

implemented to improve customer conﬁdence?

(Please list them)

48. Which of the following schemes and

initiatives have you accessed during the COVID-

19 pandemic

Coronavirus Job Retention Scheme

Self-Employment Income Support Scheme

Government-backed accredited loans or

ﬁnance agreements

Business grants funded by Welsh

Government

Business rates holiday

Deferring VAT payments

HMRC Time To Pay scheme

49. Are there any new schemes you would

recommend that could help to reinvigorate your

business sector? (Please list them)

50. In your view, what policy support would your

business like the government to introduce to

help businesses in the country recover from the

impact of COVID-19? (Please list them)

51. What sort of support and investments would

you like to see the public sector (Government,

Local Authorities) implement to help support the

recovery from the COVID-19 pandemic?

Section 5: Business Financing

52. What are your business’ main sources of

ﬁnance? (Please list them)

53. Does your business usually use bank loans

and credit facilities?

Yes

54. Has your business been able to apply for a

bank loan successfully during the pandemic?

Yes

55. Has your business’ level of external debt

risen during the pandemic?

Yes

56. Has your business applied for loan

repayment holidays because of the impact of

COVID-19 on your revenue?

Yes

57. Have your business’ ﬁnances remained

stable during the COVID-19 pandemic?

Yes

58. Is your business eligible to apply for any of

the government funding schemes?

Yes

59. If you answered ‘yes’ to question 58 above,

please list the scheme(s)

60. Has your business successfully applied for

any of the government’s funding schemes in

question 59 above?

Yes

61. If your answer to question 60 is ‘yes’, how

much in total did your business receive in pound

sterling (£)?

The value must be a number

Section 6: Additional Information

62. Has your business experienced any of the

following digital connectivity issues during the

COVID-19 pandemic? Please tick all that apply

Low broadband speed

Lack of reliable broadband / mobile

signal

Lack of digital skills in your business

Lack of training opportunities for digital

skills

Lack of awareness of schemes to help

improve digital access

Lack of broadband / mobile options

Cost of access

Other

63. How conﬁdent do you feel about the

recovery of the economy from the COVID-19

pandemic?

Very conﬁdent

Conﬁdent

Neutral

Not very conﬁdent

Not at all conﬁdent

64. How conﬁdent do you feel about life

returning to normal in the near future?

Very conﬁdent

Conﬁdent

Neutral

Not very conﬁdent

Not at all conﬁdent

65. Would you like to be involved in a focus

group to explore some of the impacts of the

COVID-19 pandemic in Ceredigion in more

detail?

Yes

66. If you answered ‘yes’ to question 65 and

would like to take part in a focus group, please

provide your contact details:

...........................................................................................................

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Dec 2020
WORLD DEV

We provide evidence on the economic and well-being impact of the Covid-19 lockdown on a sample of households in rural Uganda. Our sample consists of 1,277 households randomly drawn from 114 rural villages in western Uganda and surveyed in-person in early March 2020, just before the lockdown. We followed up with this sample in May 2020, reaching over 85% of them by phone. We find a large decline of 60% in household non-farm income due to household enterprise profits and labour income being almost wiped-out post the lockdown. Households respond to this loss of income in three key ways. One, there is a 40% decrease in food expenditure per adult equivalent. Two, they use up nearly 50% of their savings and borrow more, but have not yet liquidated their fixed assets or sold livestock. Three, they increase total household labour supply to household farm and livestock, more than making up for the decline in supply to enterprises and labour outside the household. We find a decrease in well-being as a result of this: there is an increase in the likelihood of missing a meal, a decline in reported satisfaction with quality of life, a higher likelihood of having a major argument with their spouse and an increase in perceived frequency of intimate partner violence against women in the village. The negative effects of the lockdown are greater for households that were wealthier at baseline, since these households were more reliant on enterprise and salaried income. These results were one of the first to show a large negative impact of the lockdown for a rural population. Our findings are important to policy makers in Uganda and other developing countries as they suggest income and consumption support is needed for rural households.

The Economic Impact of the COVID-19 Pandemic on Ceredigion Businesses and Self-employed

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