Firms 'fall through cracks' of Covid support scheme

More than 70,000 small businesses who are eligible for grant funding have not received it

Frustrated small business owners say red tape is preventing them getting hold of government cash designed to keep them afloat during the pandemic.

More than £12bn was given to local authorities to pass on to eligible small businesses across England, but nearly £1.5bn remains unclaimed.

One entrepreneur said accessing the cash had been like "banging your head against the wall".

Councils said they needed to act within the national guidance.

Gina Broadhurst, co-founder of Forgotten Ltd, a campaign group set up to help businesses, said many firms had "fallen through the cracks".

"We're at a critical point where for businesses to survive and to be able to continue to employ millions of people, cash support is needed.

"I think we've got a tsunami of insolvencies, closures and job losses on the cards imminently."

Support was announced in March in the form of the Small Business Grant Fund and the Retail, Hospitality and Leisure Grant Fund.

In May, a discretionary grant fund to be administered by local councils was also announced.

'It's a postcode lottery'

Claire Rose said the uncertainty over the grant put pressure on her

Claire Rose, who runs an educational consultancy firm in Cambourne, Cambridge, said she desperately needed financial support when schools closed.

The 38-year old was eligible for the discretionary scheme, but the council restricted payouts to firms who paid at least £250 a month in rent.

"It's essentially a postcode lottery depending on the local area that you're in," she said.

"I just desperately need to keep my business going now. If my company doesn't make it, then there are...[sub contractors] jobs at risk as well."

South Cambridgeshire Council said it had aimed to support firms "with the greatest need".

'My business could be taken away'

Colin Kent said the process was "very frustrating"

Colin Kent, a shop-owner in Birmingham said accessing the small business grant was "like banging your head against a brick wall".

The 45-year old said the grant was not processed because an administrative error had left his business without a rateable value.

"It's very frustrating, this money was given to them by the government for small businesses like mine and they're not giving it out," he said.

"They are sticking to the rules rigidly, and if the valuation office doesn't come back to us by the end of August then we've lost [the grant]."

"I feel really down, I started the business in 2002 and something I struggled to build up could just be taken away from me."

A Birmingham City Council spokesman said it administered the grants within the guidelines, distributing more than £200m to 17,000 businesses.

Kawsar Zaman, a barrister at No5 Chambers in London, who has been advising small businesses, said some councils had applied the eligibility criteria in an "overly prescriptive manner".

Kawsar Zaman said some councils were rejecting applications

Mr Zaman said he had assisted some companies who were struggling to get the grant because of "mere technicalities" such as lease agreements not being in the firm's name.

"It is apparent that some local authority officers do not fully appreciate that where there is a policy or criteria in place, there must be scope for discretion," he said.

Concerns over fraud were valid, he said, but there were other ways to mitigate the risks.

Calling for an independent appeals process, he said firms should not be expected to go through "costly and time-consuming applications for judicial review".

A spokesman for the Local Government Association said authorities had given out almost £11bn in cash grants.

"These schemes are governed by nationally-issued guidance and councils need to apply this to each individual application," the spokesman said.

A Valuation Office Agency spokesman said it had received "a number of requests" to look at the rateable value of business properties.

"We are progressing these cases as quickly as possible," he added.

While applications for grants close on the 28 August, the government has said councils have until 30 September to make final payments.