Coronavirus: Business groups urge for an extension to grant schemes

Business groups are urging the government to extend deadlines and change the rules around business support schemes, as deadlines near.

Three funding schemes – the Small Business Grants Fund, Retail, Hospitality and Leisure Business Grants Fund and the Discretionary Grants Fund – will shut on 28 August if deadlines aren’t moved, and any unclaimed funds will need to be returned to the government.

The Local Government Association (LGA), the Institute of Directors (IOD), the Federation of Small Businesses (FSB) and the British Independent Retailers Association have so far called for extensions to the schemes.

Councillor Richard Watts, chair of the LGA’s Resources Board, said: “Councils have given out almost £11bn ($14bn) in cash grants to businesses and worked hard to set up discretionary schemes to help support as many more as possible.

“It was a huge task to set up these schemes from scratch and the funding has been a lifeline to struggling businesses worried about the future.

“Shutting the discretionary scheme would be a mistake by the government at this time. Councils need more time and flexibility to ensure as many businesses can benefit from this funding.

“The government also needs to commit to redistributing any unspent resources from the original schemes, including any clawed back, to councils to be spent on local efforts to help further support businesses and reboot local economies.”

Recent reports warnings from the FSB showed that almost £1.5bn of the £12bn on offer in support was still sitting in councils’ bank accounts.

READ MORE: Coronavirus: Millions earmarked for small businesses unspent by councils

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 also showed that as of 3 August, £10.83bn had been paid out to over 882,920 business properties.

Tej Parikh, chief economist at the IOD, said: "For many small businesses, the fight is far from over. It would be deeply disappointing if this support was withdrawn before time.

"Demand for the discretionary fund shows that many businesses have fallen through the cracks of the main schemes.

"With reopening and adjustment costs ahead, money will be tight for small businesses. Councils have been working to get the money to the front line and should be given the resources to kickstart local business recoveries across the country."