In the second report from its inquiry into the Economic Impact of Coronavirus (published tomorrow - 11 September), the Treasury Select Committee (TSC) has urged the government to outline a plan for how to support SMEs struggling with debt within the next three months. The Committee warns that failure to act and develop solutions to recapitalise SME balance sheets could risk prolonging the recession resulting from the pandemic.
Commenting on the report’s recommendations, Miles Celic, Chief Executive Officer, TheCityUK, said,
This Select Committee report adds to the growing consensus that large-scale unsustainable SME debt is likely to become a drag anchor holding back the UK’s economic recovery. There is no easy answer to this problem, but a great deal of creativity and innovation is going into finding a viable way to convert, restructure and repay this debt. Our industry is determined to play its part, and we will continue to put our shoulders to the wheel to help push the recovery forward.”
In July, TheCityUK, supported by EY, published the final report of TheCityUK Recapitalisation Group, outlining its evaluation of the recapitalisation challenge faced by the UK, as well as a series of options to address the problem. The report, ‘Supporting UK economic recovery: recapitalising businesses post-Covid-19’, is available on TheCityUK’s website.