Businesses left in the lurch as up to £1.4bn of Covid-19 grants still unpaid
Local authorities across England are still yet to pay out as much as £1.4bn in emergency Covid-19 grants, putting thousands of businesses at risk of further job cuts.
Figures obtained through a Freedom of Information request revealed that an estimated 87 per cent of the £1.6bn Additional Restrictions Grant (ARG) fund still has not been awarded, despite the scheme launching four months ago.
The ARG, launched by the government in October, provides funding to local authorities to support businesses forced to close or badly impacted by Covid-19 restrictions and is worth up to £3,000 per company each month.
This includes companies in the retail, hospitality and leisure sectors, as well as events and exhibitions businesses.
But the figures showed the vast majority of eligible firms are yet to receive money, despite the scheme being extended in January.
As of 1 February, Brent Council had paid out £696,000 of ARGs, just seven per cent of the £9.5m it was awarded by the government, while Ealing had paid out none of its £9.9m funding.
Across England as a whole local authorities have only paid out an average of 13 per cent of the government grants, according to the figures obtained by the Events Industry Alliance (EIA).
The figures have sparked concerns that businesses relying on the funding to meet short-term costs such as staff wages will be forced to make further job cuts.
“We are making an urgent call on the UK government and local MPs across England to provide clear guidance to local authorities on issuing the Additional Restrictions Grant, in order that payments are made to eligible companies as soon as possible,” said Andrew Harrison, director of the Event Supplier and Services Association.
“Businesses in the events and exhibitions sector have been forced to close due to Covid-19 restrictions and therefore require appropriate financial support if they are not permitted to operate. It is now up to local authorities to ensure proper economic support is delivered to the sector.”
London events companies have previously hit out at ARGs, describing the process as a “postcode lottery”.
Research by the EIA found that London councils, including Hackney, Brent, Kingston-upon Thames, Islington and Bromley, are among the areas where businesses have struggled to access support.
Councillor Margaret McLennan, deputy leader of Brent Council, described the grants scheme as “complicated and restrictive”.
“We have processed 100 per cent of legitimate ARG requests within 20 days of receiving an application. Our team has given out £1.8m in grants since Brent’s ARG scheme went live at the end of November,” she said. “We are delighted that we can finally help those companies that have been left in the lurch by the government.”
Ealing Council has been contacted for comment.