Coronavirus: Millions earmarked for small businesses unspent by councils

Lucy Harley-McKeown
·2-min read
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Millions set aside for coronavirus support will be return to the Treasury. Photo: Getty

Coronavirus support funding for businesses will be returned to the Treasury if it is not claimed by the end of the month, business leaders have said.

Almost £1.5bn ($2bn) of the £12bn on offer in support is still sitting in councils’ bank accounts, according to a report by the BBC and a warning by the Federation of Small Businesses (FSB).

The grants, announced on 17 March, are lump sums of £10,000 through the Small Business Grant Fund, and £25,000 through the Retail, Hospitality and Leisure Grant Fund and were intended to help cash flow throughout the pandemic.

Data shows that as of 3 August, £10.83bn has been paid out to over 882,920 business properties.

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It also shows that of the 314 English councils distributing the funds, 291 have had at least one business that was entitled to support that did not receive it.

Alongside this, 24 authorities paid out more than their allocation. The data suggest that Westminster City Council paid out £17m more than it was entitled to, according to the BBC.

The report shows that as of the end of July, Wirral Council held £14.7m of unspent funding.

A spokesman for the Department for Business, Energy and Industrial Strategy told the BBC: "We are working with local councils to ensure funds get to as many eligible small business owners as possible.

"Businesses that are eligible but have not yet received grant funding should speak to their local council as soon as possible."

There are two types of grant available for businesses. Small businesses must be based in England, occupy property for business use and have been eligible by 11 March 2020.

The retail, hospitality and leisure grant requires businesses to be mainly used as a venue for leisure, hospitality or retail.

The Local Government Association (LGA) said local authorities needed more time and flexibility to ensure businesses benefitted from the funding.