Council preparing to launch local small business support scheme
The Government has now outlined the criteria it wants councils to apply to the new Local Authority Discretionary Business Grants Fund it announced on 2 May but has yet to notify the Council of the value of its allocation.
However, Telford & Wrekin expects to get just £1.4 million for this compared to the allocation for the national scheme which was over £35m. The Council is now developing its own grant fund to support borough businesses that have fallen through the net of the Government’s initial business support scheme for small businesses hit by the coronavirus pandemic. However, the value of the likely allocation will severely limit how many businesses can benefit from the scheme.
The Council expects to open the fund for applications next week.
Government says that grants must be for £25,000, £10,000 or a figure below £10,000. If applicants received £10,000 the Council says it could support around 150 borough businesses while it expects demand to greatly exceed this.
Councils are also asked by Government to prioritise the following:
•Small businesses in shared offices and other flexible workspaces
•Regular market traders
•Bed & Breakfasts not paying business rates
•Small Charity Properties
This will likely lead to any scheme excluding many borough-based manufacturers which form the backbone of Telford’s economy.
Additionally, Government guidance states applicants will need to show a “significant” loss due to the pandemic and have “relatively high ongoing fixed property-related costs”.
The Council is now working on developing the criteria for its scheme and an application process that is as streamlined as possible but that collects information needed to satisfy the Government’s criteria. The Government states that it anticipates “the first payments made under the scheme will be received by businesses by early June” and the Council will continue to work hard to get this essential support to eligible businesses as quickly as possible.
Council leader Shaun Davies said: “We are working to get this new scheme open as a matter of urgency as there are many borough businesses desperate for help.
“However we are deeply disappointed that because of the conditions set by Government any scheme we develop will offer too little help to too few businesses. It feels like we’re being set up to fail.
“The Government’s criteria essentially leaves many manufacturers high and dry, while we expect applications to quickly outstrip the fund’s value, meaning that many businesses in real need will not get the help that they so badly require.
We have no scope to support many companies who have come to us because they fall outside the Government’s grant programmes.
“The Government is forcing us to tell a small manufacturer with two or more properties whose rateable value does not exceed £15k – tough. If you’re in the hospitality/retail sector and your rateable value is over £51k - tough
“When the Government announced its £617 million allocation for this on 2 May, we expected to receive a share of this, but initial indications are that only 5 councils out of more than 300 will initially receive funding from this pot.
“Many businesses will be deeply disappointed either because they aren’t in one of the Government’s priority categories or, because of the fund’s value, we simply can’t provide the level of support they need to keep going.
“I will be urging our MPs to lobby for borough businesses who continue to fall through the cracks because the Government has made it nigh on impossible for us to support them.”
Details of the new fund will be published at www.telford.gov.uk/coronavirus and the Council will also be reviewing unsuccessful applicants for the initial fund to see if these qualify.