Coronavirus: Hundreds of thousands for small enterprise ‘sitting in council accounts’

Emergency coronavirus funding for corporations will return to the Treasury on the finish of the month if it isn’t claimed, enterprise leaders have mentioned.

4 months after £12bn was launched to assist them by means of the coronavirus pandemic, £1.5bn is unclaimed.

The Federation of Small Companies (FSB) warned the cash was sitting in councils’ financial institution accounts.

The federal government mentioned it was working with councils to achieve eligible companies.

Emergency grants for companies in England had been introduced on 17 March.

Lump sums of £10,000, by means of the Small Enterprise Grant Fund, and £25,000 by means of the Retail, Hospitality and Leisure Grant Fund, had been supposed to assist companies’ money flows in the course of the coronavirus pandemic.

‘Restrictive standards’

As of three August, £10.8bn had been paid out to just about 900,000 companies, leaving £1.5bn but to achieve practically 80,000 eligible corporations by late August, in accordance with official knowledge.

The figures counsel multiple in 5 companies in areas resembling Wealden, South Lakeland and South Somerset haven’t claimed grants.

Of the 314 English councils distributing the cash, 291 have not less than one enterprise entitled to help that has not acquired it.

The figures additionally counsel there are 24 authorities that paid out greater than they had been allotted. Westminster Metropolis Council paid £17m greater than it was allotted.

Mike Cherry, chairman of the Federation of Small Companies, urged corporations to use for the grant funding, however added it shouldn’t be returned to the federal government if it was not claimed by the deadline.

“There are a lot of small companies who aren’t eligible, so the federal government ought to widen the standards to these on the periphery,” he mentioned.

He added the cash can be a “Godsend” for companies omitted by the “restrictive standards” for the grant, resembling corporations in provide chains to different small ventures.

‘Sitting within the council’s financial institution’

Wirral Council held £14.7m of unspent funding as of the top of July.

Councillor Ian Lewis mentioned: “From my discussions with enterprise homeowners and shopkeepers in Wallasey, some don’t realise that it is a grant, not a mortgage, so it would not need to be repaid. Even companies that had been capable of keep open are eligible.

“It might be tragic if companies shut or jobs are misplaced as a result of they don’t apply for this cash – it is actually sitting within the council’s financial institution ready to be claimed.”

Who’s eligible?

Companies can apply for one of many following funds:

• For the small companies grant they should be primarily based in England, occupy property for enterprise use and have been eligible for aid on varied charges by 11 March 2020.

• To entry the retail, hospitality and leisure grant the enterprise should be primarily used as a venue for hospitality, retail or leisure. Some charities can even apply.

Brent Council in London mentioned it was telling companies in “any means we are able to” concerning the grants, because the borough didn’t wish to hand again any of its £4.5m remaining funds to the federal government.

Councillor Shama Tatler mentioned it was “a shock” the federal government was seeking to “finish the schemes and demand the cash again”, earlier than all eligible companies had been contacted.

“We now actually have a crew of officers bodily knocking on individuals’s doorways and urging them to assert earlier than the deadline,” she mentioned.

A spokesman for the Division for Enterprise, Power and Industrial Technique mentioned: “We’re working with native councils to make sure funds get to as many eligible small enterprise homeowners as attainable.

“Companies which might be eligible however haven’t but acquired grant funding ought to communicate to their native council as quickly as attainable.”

Extra reporting by: Anna Khoo and the Native Democracy Reporting Service