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£1.7 billion still to be distributed from Government Small Business Grant system

08 07 20 1 7 billion still to be distributed from Government Small Business Grant system hero

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 to data just published by the Government, £1.7 billion of the Small Business Grants Fund (SBGF) and Retail, Hospitality and Leisure Grants Fund (RHLGF) allocated to local authorities to pay to businesses has still not yet been distributed, despite the fund being set up 15 weeks ago on 23 March.

Of the £12.33 billion originally allocated, some £10.65 billion or just over 86% has been paid out, leaving 14% still undistributed to businesses.

In particular:

  • Tendring District Council in North East Essex has only paid out £32.6 m or just 41% of its £80.27 m allocation.
  • East Sussex Council and Bournemouth have only each paid out 60 and 62% of the grant monies they were allotted, (£60.7 m out of £101.5m and £76.9m out of £128.8m, respectively).
  • And a total of 19 Local Authorities have paid out less than 75% of the grants they were allocated
  • By contrast at the other end of the scale, Westminster Council has paid out more than its allocation, paying out £94 m or 120% of its £78 m allocation to businesses and the City of London has distributed 119% or £17.6 m of its £14.74 million allocated

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. One can conclude that either certain Local Authorities have been too short staffed or particularly 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 points out that the way the grants were allocated in the first place, based purely on business rates liability has thrown up many inefficiencies and inconsistencies in the system, particularly when comparing the small size of grant allocation to places like the City of London which received only a £14.74 million allocation, despite the recognised large number of businesses based there.


This was mainly because the grants were based on business rates liabilities – and many small businesses were paying higher rents and rates in the capital than elsewhere and were therefore unable to qualify for the grant.

The Government’s additionally £617 m discretionary grant, introduced at the beginning of May, aimed at small businesses with ongoing fixed property-related costs, has also not plugged the gap as much as expected. It appears the pot for this fund was too small to help all the businesses that could qualify. Only an extra 5% of grant was allocated to each individual local authority to use as it thought fit. This did not take into account the actual number of businesses in a borough that might be eligible for such relief. For example, the City of London with an initial grant of £14.74 million, now has an extra 5% or £737,000 to allocate. At £10k per business to distribute this means it could only distribute to 73 businesses - so even more businesses are falling within the cracks and not receiving vital funds.

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 40% of businesses in places like Bournemouth 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 - in the City and in other regional centres of the UK. Small businesses are the lifeblood of the economy and we urge the Government to look again at the way it 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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John Webber

Head of Rating

Rating

Birmingham

I have over 30 years’ experience in the rating industry and lead a 90 plus rating team at Colliers International.  When I took over responsibility for the team in 2005, it consisted of only a dozen people and has now grown into one of the leading rating advisory teams in the country.  I am a member of Colliers International Management Executive as well as sitting on the company’s promotion panel. 

I am regularly called upon by the national media to give my views on a range of business rates issues and I am vocal commentator on the 2017 Revaluation.

I started my career in the Valuation Office Agency in Kidderminster.  I joined Gerald Eve in 2000 where I spent 10 years before moving to Gooch Webster (now Colliers International). I sit on the National Retail Panel of Rating Surveyors Association which provides guidance on how the RSA town committees work with the VOA and valuation matters.  John sits on the RICS Rating Diploma Committee having passed the prestigious qualification in 2014.

Philip Harrison and I founded 'Accurates' in 2007, the Collier's Compliance and Audit team, which although forms an integral part of the Rating Team is now a leading brand in its own right.

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Suzy Simpson

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London - West End

As Head of Content, Communications & PR for Colliers in the UK, I am responsible for driving the strategic direction of corporate communications, media relations, and the programming and production of multi-channel content to engage external and internal audiences across the UK.

Get in touch for help with: 

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