An industry misunderstood and missing out

The failure to access grants and rates support is putting the supply chain at risk. But it’s ignorance that’s causing the big problem suggests Mike Clokie at E-Service. The authorities don’t understand what the industry is and does; and worse, it’s perception is driven by misleading negativity around the media. Once the industry is recognised, however, “it will be easier all round”.

MIKE CLOKIE MANAGING DIRECTOR E-SERVICE (EUROPE)

The supply chain has been unable to access many of the government’s support measures. What impact is this having on the sector?

The difficulty in accessing grants and waivers etc, is that we in the supply chain often fall between the cracks, very little of our equipment and spares are supplied directly to the leisure and hospitality industry. The red tape that surrounds proving supply to the leisure and hospitality hinders negotiation with local government associations who themselves find it difficult to understand the true nature of the gaming and amusement supply chain.

Not having grants and rates waivers readily available puts the supply chain at risk. We know the cashbox drives the industry, zero spend in the venues impacts all businesses involved. Not providing assistance and support to businesses within the supply chain will inevitably lead to closures. Local government authorities need to broaden their understanding of businesses and not be blinkered in their approach in offering support. One mention of gambling, fruit machine, adult gaming centre, all are met with no, in part due to the negativity peddled by the mainstream press.

How have businesses in the supply chain managed to function in the absence of these measures?

Furlough has been the only meaningful life line. Without this we would have seen devastating and irreversible impact across many industries and unemployment soar, the supply chain to the UK gaming and amusement industry being no exception. From an E-Service stand point, we reduced staff to the bare minimum furloughing over 90 percent of employees. We looked to diversify evaluating other industries and product lines which brought some success, however this was nowhere near what was required to cover our fixed costs.

What measures are required to protect the supply chain over the coming year?

Provide access to the loans and rates waivers as other industry sectors have received, establish exactly what category or sector the supply chain to the gaming and amusement industry falls within.

Once our sector is recognised it will be easier all round to gain access to the support we desperately require. The supply chain has not been recognised as part of the industry when it comes to support measures.

Why is there a blind spot to the supply chain, and how can this be changed?

Change in perception must be brought by local lobbying of MPs detailing the plight of businesses within their constituencies and at a national level via GBG and Bacta. We must provide an industry synopsis to decision makers enabling a clear understanding that our industry is not just taking money from cashboxes. We must detail the supply chain from component supply to manufacture, distribution and operation.

Mike Clokie said… Local government authorities need to broaden their understanding of businesses and not be blinkered in their approach in offering support. One mention of gambling, fruit machine, adult gaming centre, all are met with no…

The government response has been to point to other business support measures available. What are your views on:

Government support for for self employed directors paid through dividends?

There certainly needs to be some recognition for the significant number of business directors who pay themselves by dividend only. I believe a scheme is being proposed by Paul Scully, Minister for Small Businesses, what this will look like we will need to wait and see. Certainly a difficult one, what figure would you use as a cap, even the full furlough amount of £2500 per month would be beneficial.

Bounce back loans: are they lifeline or another long term debt?

I believe the bounce-back loan scheme will suit some businesses, it’s horses for courses. The interest rate is low at 2.5 percent, it’s an unsecured loan and you’ve got 6 years to pay it back. On the flip side it’s a loan so it needs to be paid back, it’s capped at £50K and it restricts your entitlement to other corona virus funding schemes.

Is the furlough scheme still viable if the industry stays shut until May?

It needs to be a mixture of rates waivers and furlough, which is still the job retention scheme, however I feel that post budget we will see it changed to the job support scheme which was initially proposed last autumn. A flexible furlough scheme is probably the right move, staff working a minimum of one third of the week could be the right number. Any scheme needs to encourage the retention of workers on a part time basis while we gain momentum within the industry.