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South: Councils slow to pay out grants to small businesses

By Dan Teuton
30 April 2020

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 smaller businesses, during the Covid-19 pandemic and about how fairly many these have been allocated.

According to latest data published by the Government, five weeks after the grants were announced, 38% of the amount allocated to local authorities to pay to smaller businesses has not yet been paid out. The 62% paid represents £7.6 billion of the £12.33b - an increase from the 49% figure of paid out grants announced last week.

The Covid-19 Grants, announced on March 24 were designed to cover a business’s fixed costs and promised:

  • A grant of £10,000 for all businesses in receipt of small business rates relief or rural rates relief.
  • Businesses in retail, leisure and hospitality to receive a grant of £10,000 if they have a rateable value up to and including £15,000 and a grant of £25,000 with property with a rateable value between £15,000.01 and less than £51,000. This is paid per property.

Colliers has analysed the percentage of grants actually paid to smaller businesses compared to what the local authorities have been authorised to allocate and have found massive discrepancy across the country:

  • The most efficient place in the country in paying out its allocated grants is the London Borough of Ealing which has paid out £64 million or 94% of the £68.2m which it has been allocated to distribute.
  • One of the worst places is 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 which is 24%.

Other findings Colliers has discovered analysing the tables is:

  • Of the major cities, Birmingham City Council and Manchester City Council have been particularly slow in handing out much needed grants and have distributed only 37% each. Birmingham City Council had £231.58m to allocate. So far it has given out £86.1m. Sitting next door to Sandwell, highlighted above, it is clear small businesses in the West Midlands can feel particularly aggrieved.
  • Manchester City Council had half the number of grants to distribute as Birmingham - £121m - of which it has so far allocated only £45.3m.
  • The UK’s cities vary widely as to how successful they have been in allocating their grants. Cities who beat the national average include Cambridge (78% distributed), Reading (74%), York (84%), Newcastle (71%), Bristol (76%) and Leeds (69%).  However, Slough (28%), Nottingham (49%), Manchester (37%), Sheffield (49%) have still paid out less than half their grants. Along with Liverpool at (55%) they still have some way to go.
  • The Council with the biggest allocation of grants to hand out is Cornwall Council – with £281.45m to allocate to 23,828 properties (of which it has allocated £194.825 million or 69%.) This implies that there are more small businesses and retailers claiming rates relief in Cornwall than in any other part of the country. To quote John Webber, Head of Business Rates at Colliers International: “That’s a lot of holiday homes businesses!”
  • Although Westminster City Council appears to have been efficient handing out 93% of its grants, it only had £78m to distribute to a total of only 4,536 businesses -of which £72.79m has been given out. And the City of London’s numbers are even more extraordinary -with only 968 businesses eligible for the grants or £14.74m to allocate, or which 81% has been distributed.

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