Councils to Distribute £1bn of Unspent Grants

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Councils to Distribute £1bn of Unspent Grants

Local authorities still have £850m worth of Covid grants to distribute to hospitality businesses that closed because of Omicron, as well as a further £350m, which hasn’t yet been spent from previous pandemic financial support schemes. 

Local councils are now sitting on £850m worth of Covid grants, which were meant for hospitality businesses that had to close because of Omicron.

In addition to this, there is an extra £350m worth of Covid grants that are still unspent from previous Covid-19 small business grant schemes.

In December, the government announced their £1bn scheme of one-off grants worth up to £6,000 per premises for businesses in the hospitality and leisure sectors. This would be worth a total of up to £683m for around 200,000 businesses in England.

The Omicron Hospitality and Leisure Grant scheme provided one-off cash grants of up to £6,000.

Mike Cherry, national chairman of the Federation of Small Businesses, commented: “Close to a billion pounds worth of business support grants for those most in need are still yet to reach them. It’s exasperating to see that, after all this time, some authorities still haven’t got their houses in order.”

However, hospitality businesses may need to wait until March before they see any of this financial support.

Mike Cherry told The Times, that as small businesses are now facing large rises in national insurance and increases in business rates in 2022, “this can’t come soon enough”.

Some local authorities have distributed a far greater proportion of Covid-19 grants than others, according to the FSB. So far, councils in the South West have only distributed 4 per cent of the funds, whilst councils in Yorkshire have spent 20% of their grant allocation.

However, local authorities argue that these grants are actually “unclaimed rather than undistributed” and that they are having to cope with multiple time frames when grants were distributed, as well as anti-fraud checks.

Kwasi Kwarteng, the business secretary, has advised local authorities to distribute the remaining funding.

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