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Nearly 40% of grants not yet paid out by local authorities, while smaller businesses in London ‘missing out'

30 April 2020 by
Nearly 40% of grants not yet paid out by local authorities, while smaller businesses in London ‘missing out'

Business rates experts at Colliers International are concerned about the lack of urgency many local authorities are showing in paying out much-needed grants to businesses and about how fairly many of these have been allocated.

According to data published by the government, five weeks after the grants were announced, 38% of the amount allocated to local authorities to pay to eligible businesses has not yet been paid out.

The grants, announced on 24 March, included a grant of £10,000 for businesses in receipt of small business rates relief or rural rates relief; and hospitality businesses were to receive a grant of £10,000 if they have a rateable value up to and including £15,000, or £25,000 for a property with a rateable value above that but less than £51,000.

Colliers has analysed the percentage of grants actually paid to businesses compared to what the local authorities have been authorised to allocate and said it had found "massive discrepancy" across the country.

The most efficient place in the country in paying out its allocated grants has been the London Borough of Ealing, which has paid out £64m, or 94%, of the £68.2m which it has been allocated to distribute.

One of the worst places was Sandwell Metropolitan Borough Council, which has paid out less than a quarter of the grant monies allocated, just £17.27m of a total allocation of £73m, or 24%.

Of the major cities, Birmingham City Council and Manchester City Council have been particularly slow and have distributed only 37% each.

The council with the biggest allocation of grants to hand out was Cornwall, with £281.45m to allocate to 23,828 properties (of which it has allocated £194.825m, or 69%), suggesting there are more small businesses and retailers claiming rates relief in Cornwall than in any other part of the country.

Although Westminster City Council appears to have been efficient handing out 93% of its grants, it only had £78m to distribute to 4,536 businesses. The City of London had only 968 businesses eligible for the grants, or £14.74m, of which 81% has been distributed.

John Webber, head of business rates at Colliers International, said: "The implication here is that there are more businesses eligible for grants in Cornwall than there are in the City of London and Westminster combined. If there was ever evidence that more small businesses and retailers in London are falling between the cracks in the process of grant allocations, this is it.

"Many have been cut out of consideration because the criteria for grants is based on business rates and given the high rents (and thus high rates) in London, many retail and hospitality businesses in London do not qualify for relief at all, whereas they probably would do if they were based in other parts of the country."

Colliers has said using the business rates system as a means of allocating the grants has meant thousands of smaller businesses have missed out.

Webber added: "We urge local authorities to dish out the grants more efficiently and quickly. A week ago, less than half (49%) of grants had been issued. While it's good to see this figure is now above 60%, it is now over five weeks since the grants were announced and that's an awful long time to be without funds and for nearly 40% of grants not to be distributed. Those boroughs with the lower percentages must improve efficiency."

Photo: Shutterstock

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