Martin Bell

The latest BDO Rethinking the Economy survey showed that 56% of Scottish businesses predict they will fully recover in less than six months once a vaccine for COVID-19 is made available. 85% said they would recover in a year of a vaccine roll-out.

However, almost half (47%) of those polled said they were less optimistic about the UK’s economic recovery compared to three months ago and only 20% have made significant changes to their business plans, following recent news regarding vaccines.

This is in contrast with England and Wales, which both show increased optimism about the pace of the UK’s economic recovery.

The survey also showed that 80% of businesses expect the Government’s tiered system to lead to a greater economic regional divide, with more than a quarter (26%) of businesses having to put additional staff on furlough, following the extension of the Job Retention Scheme, and 35% continuing to invest in technology to enable home working.

Martin Bell, partner and head of tax for BDO in Scotland, said: “News of positive vaccine trials has clearly buoyed Scottish businesses, in terms of their ability to recover quickly from the impact of COVID-19. However, there is still a degree of caution amongst Scottish businesses regarding the pace of economic recovery in the UK.

“The most immediate concern for Scottish businesses will be surviving a difficult winter on low cash reserves, coupled with uncertainty around on-going localised restrictions. Last week’s Spending Review probably didn’t go far enough to boost business confidence in the short to medium term.

“Medium-sized businesses are important employers in Scotland and they will play a major part in the overall recovery of our economy. Therefore, it is crucial that the Government maintains timely communication and ensures that proportionate financial support and packages are available for businesses which have been impacted more severely by lockdown restrictions.”