Firms accuse local councils of sitting on their emergency lockdown support grants

The Treasury also announced today that more than 1.4 billion government-backed loans have been taken up by businesses around the UK

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Naomi Ackerman @nomiackerman

19 January 2021

The Treasury said on Monday that more than 1.4 billion government-backed loans have been taken up by businesses and used to support jobs around the UK since the pandemic broke out.

Chancellor Rishi Sunak said the loans have helped to protect jobs and livelihoods up and down the country, and reiterated a commitment to safeguard employment and create opportunity.

The retail and construction sectors were the biggest beneficiaries, according to the Treasury’s data, with regions "receiving loans proportionately to the amount of businesses located there".

The news came as the Events Industry Alliance (EIA) accused local councils of failing to pay out the administration’s much-publicised emergency support grants, aimed at giving firms vital cash injections.

The Chancellor announced back in late October that local authorities would distribute up to £3,000 per month in grants to firms forced to close - or which were being “severely impacted” - by the November lockdown.

This was followed by an announcement on January 5 that firms could apply, again through the same process, for up to £9,000-per-property in grants as part of a £4.6 billion lockdown support package.

The EIA, which represents companies across the events sector, said a new survey of its members suggests a "postcode lottery", with several London councils among a “sizeable number” yet to pay out the first tranche of grants.

The report accused some councils of not yet having begun making these payments three months later, of some councils failing to provide scheme details on their websites, and of others not responding to applications from companies eligible for support.

The sector, which generated around £11 billion pre-Covid and supported more than 100,000 jobs, has been badly hammered by the pandemic. The EIA said today that firms are “being forced into making further job cuts or bankruptcy due to these local council delays”.

Andrew Harrison, director of the Event Supplier and Services Association, said: “We are making an urgent call on the UK Government to provide clear guidance to local authorities on issuing the Additional Restrictions Grant, and to ensure concerted action is taken to address problems in the business support system.

“It is now up to the UK Government to monitor and assess which local authorities are delivering proper economic support to the sector.”

It comes after top hospitality firms and other business organisations warned that they are also yet to receive the grant cash.

David Page, chairman of Fulham Shore - the company behind Franco Manca and The Real Greek - told the Standard that the situation is “shocking”.

Page, who accused councils of putting in reams of forms and red tape for businesses to complete to access grants, said the majority of the firm's 72 sites are yet to receive any of the grant payments.

Darren Jones, chairman of Parliament's business committee, told the Telegraph that town halls are struggling with "complex rules" set by Government on how to distribute funds. He said: "The Government should look again at how it works with local authorities to guarantee this support gets to businesses fast.”

A London Councils spokesperson told the Standard that boroughs are “working flat out to help businesses that need their support”.

The spokesperson said that the “formal guidance along with the provision of the grant allocations to boroughs ” for the Additional Restrictions Grant was not issued until December, and said that London Councils is “lobbying government to simplify the [grants] process so we can assist as many businesses as possible through this difficult time”.

She said: “The government is clear that the Additional Restrictions Grant is to provide funding to support businesses until March 2022 and an additional top-up was provided on the 5th January, which also lasts until March 2022. Boroughs are calling for more information on additional funding which would allow them to plan for this 15 month period.

“Boroughs are now delivering six individual grants, all with overlapping timescales, and varying eligibility criteria.

“London’s economy is hugely complex and varied. We very much welcome the confidence central government has shown in providing boroughs with discretionary grants, as boroughs understand the needs of their local businesses. While boroughs are working to deliver these grants, we need to ensure that we take measures to tackle fraud and ensure public money is spent most effectively.”

A spokesperson for the Government said that it is working “closely" with local authorities “to ensure that funds are paid out as quickly as possible to those that need it”.

He said: “We understand these are extremely challenging circumstances for businesses. We are working closely with Local Authorities, who are responsible for administering these grants, to ensure that funds are paid out as quickly as possible to those that need it.

“Businesses can continue to access our grant schemes as part of one of the most comprehensive and generous packages of business support in the world that we have put in place, worth £280 billion.”

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