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'No running commentary' on publicly-funded retail voucher scheme

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Retail has been hit hard by Covid-19 (Liam McBurney/PA)

Retail has been hit hard by Covid-19 (Liam McBurney/PA)

Retail has been hit hard by Covid-19 (Liam McBurney/PA)

The Department for the Economy has said it will not be giving a “running commentary” on a £95m retail voucher scheme amid concerns over its timing and the mechanics of its financing.

The scheme is expected to provide individuals with a pre-paid card of up to £100 for spending in bricks and mortar retailers - including charity shops - and hospitality.

Holders of the card would not be barred from spending it in big supermarkets but will not be able to spend it online.

But SDLP Foyle MLA Sinead McLaughlin said she was concerned that the money had to be spent before the start of the new financial year in April 1 - at a time when coronavirus rates are still not under control.

She said she was concerned that the details had not been thought through.

Non-essential retail is also closed until at least February 6 under the latest coronavirus lockdown.

Ms McLaughlin, the party’s economic spokesperson, also said she was concerned that the funds on the card would be spent in big supermarkets - bypassing the independent retailers who have been forced to shut for most of the last 10 months.

The department, which is led by Economy Minister Diane Dodds, was asked to explain how the scheme’s funding would work and if there was pressure to spend the money before the end of the financial year, but would not provide the information.

It was also asked if the £95m could be spent on loading up the cards at this point before the end of the financial year - even if consumers were not in a position to spend the funds until some months afterwards in a new financial year.

A spokesperson said: “The Minister has set out the aims and rationale for the high street support scheme, and the department is working to develop the scheme within this framework. We will not be providing a running commentary on this development.

“It is clearly not appropriate to encourage shoppers out on to our high streets given the current situation with the virus.

“When we move to economic recovery our local shops will need our full support after this very difficult period, and the best way to simulate demand in our ‘bricks and mortar’ retail will be this innovative scheme to boost the recovery on high streets throughout Northern Ireland.”

In a separate statement, the department had said that the funds on the card could be spent at “‘bricks and mortar’ businesses including, but not exclusive to, our retail and hospitality sectors”.

“Charity shops will be included in the businesses where the card can be used. It will not be available for online sales so has a very clear focus on spending and supporting local.

“The delivery of the scheme will inject £95m into our local economy. The multiplier effect of this innovative financial support offering will deliver even greater economic benefits and make a significant step to kick-starting our economy.”

But Ms McLaughlin said: “I am very concerned about the proposals for the retail voucher scheme and I fear they have not been sufficiently thought through by Minister Dodds and her officials.

“The advice that we have received from officials to the Assembly’s economy committee is that the money has to be fully spent within the current financial year - and this means spent by consumers, not simply transferred onto cards that could be spent in the new financial year. Given that we seem likely to be living through pandemic restrictions for some time to come and also the impact that Eat Out to Help Out had in spreading the virus, this seems like a very serious problem.”

She said that permitting spending on the card in big supermarkets would defeat the aim of helping small retailers.

“If we are in a situation where the scheme goes ahead and where all money has to be spent by consumers in this financial year, then the big supermarket chains may be the only businesses likely to receive much trade from it. They are the very businesses that do not need it.

“The minister and the department need to be very clear as to the objective of the scheme, evaluating its actual benefit to the high street.

“Giving citizens vouchers that can be spent anywhere will have little or no benefit. It is essential to target money towards those businesses and citizens in need. The Executive and the department must be clear and consistent in the scheme’s objective.”

Businesswoman Carol Little, who owns retailer Alana Interiors in Lurgan, Co Armagh, said she strongly believed the cards should only be valid for small, local retailers.

“It should be spent in people’s local communities and I think people would be happy with that. It would be unfair if it was given to people to spend in big supermarkets as those are the big retailers who have been allowed to trade. The people who have been most affected by restrictions are those whose doors are closed at the minute.”

Northern Ireland’s scheme is to be modelled on similar initiatives launched in Jersey and Malta last year.

The Jersey scheme was rolled out by Ian Burns, the director general of customer and local services at the Government of Jersey.

He said that card provider Prepaid Financial Services had been paid around £400,000 for providing the cards, which were sent to 106,000 people on the island.

People of all ages were provided with the cards - even newborn babies, he said - though parents were enabled to spend the money on behalf of very young offspring.

The scheme had been projected to cost £11m but injected £10.12m into the Jersey economy.

Mr Burns said the scheme had been successful in giving the economy a boost when it was launched in September. Cards were sent out and had to be spent by the end of October.

He said Jersey had opted to use pre-paid cards rather than vouchers as cards were a more direct means of delivering spending in the economy.

Islands still retain their cards, he said - which has given the government the option of reviving the scheme by delivering top-ups in the future.

Nor did its scheme bar spending in supermarkets, or on alcohol and cigarettes.

He said he would recommend the scheme to other jurisdictions. “Economists and our Chief Minister were very pleased and we would recommend it. All round, from our perspective it was very successful and delivered a lot of positivity.”

He said that 103,364 islanders, or 97.5%, activated their cards, spending a total of £10.12m. The spending was 95.5% of the possible total available.

But Mr Burns said the island had fewer big, out of town supermarkets than the UK, with a Waitrose and a big Co-op its main large shops.

A Department of Finance spokesperson said: "Funding is not considered spent when it is allocated to departments.

"Under the current public expenditure rules there is very limited scope for carry forward of funding across financial years. The Finance Minister has actively encouraged Executive colleagues to ensure that any allocated funding is spent before the end of this financial year."

Belfast Telegraph


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