Friday, August 7, 2020

£126m still to be distributed from Government Small Business Grant System in the East Midlands

Business rates experts at Colliers International are urging the Government to revisit its grant scheme for businesses – set up to help with the financial impact of the COVID-19 pandemic – and to consider re-deploying some of the funds to help those businesses and the three million workers so far “excluded” from receiving any Government financial help.

According latest Government figures, of the £12.33 billion originally allocated to Local Authorities to pay to businesses via the Small Business Grants Fund (SBGF) and Retail, Hospitality and Leisure Grants Fund (RHLGF) some £10.65 billion or just over 86 per cent has been paid out, leaving £1.7 billion or 14 per cent still undistributed to businesses.

In the East Midlands the 36 local authorities, counted as being within the region in the Government figures, were together allocated £921,474,000 of grants to distribute.

So far £794,625,000 has been distributed – around 86.3% – meaning £126,849,000, or 13.7%, has not been distributed from the pot.

Looking at individual councils:

  • Derby had an allocation of £45,866,000 and has distributed £41,805,000 – 91%
  • Leicester had an allocation of £85,352,000 and has distributed £69,180,000 – 81%
  • Nottingham had an allocation of £63,436,000 and has distributed £51,295,000 – 81%

This indicates that Leicester still has over £16 million to distribute, and Nottingham over £12 million to give out.

The experts emphasise that they are not criticising local councils, rather letting the Government know the money remaining, when added up across the county, makes a useful £1.7 billion pot.

John Webber, Head of Business Rates at Colliers International, said: “I find it incredible that £1.7 billion of the Government’s grant scheme has still not been distributed to businesses despite the scheme being set up four and a half months ago. And this seems to be the pattern across the country.

“One can conclude that either certain Local Authorities have been too short staffed or inefficient in handing out much needed grants, or – and what may be more likely – State Aid rules are stopping some businesses who have multiple properties from accessing all the grants. This might particularly apply to multiple store retailers. If this is the case, then there will still be some funds going begging.”

Webber continued: “We have a bizarre scenario where on one hand we have 3 million workers and businesses ‘excluded’ from receiving Government help in terms of grants, or the discretionary fund, many of which may soon be pulling the plug on their companies.

“And on the other hand, we have £1.7 billion of grant money sitting there and not claimed after four and a half months. Perhaps it would be sensible to conclude that if after 15 weeks; a number of businesses still have not claimed funds, it probably means the grant allocated is very unlikely to be used.

“The Government might consider clawing back any grant monies not distributed by certain local authorities to use in those areas where businesses do need greater support.

“The current set up is just not working. There are hundreds of businesses that need grant help which are still being denied it – particularly in our English cities. Small businesses are the lifeblood of the economy and we urge the Government to look again at the way it is provides support to those ‘excluded’- or ‘forgotten’. Properly utilising £1.7 billion that nobody seems to be claiming would certainly seem to be a good start.”

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