Local authorities fear that funding does not meet the needs of all workspace businesses that are eligible for government grants.
Business group leaders and local authorities fear that thousands of small companies will not be able to secure emergency government grants meant to aid them through coronavirus lockdown because too little money has been allocated.
In May, the government made £617 million available for business that had not taken advantage of the earlier scheme for business rate relief. The grants of up to £10,000 will be distributed by local authorities to companies in market traders, charity shops, bed and breakfast, and shared workspaces.
However, funding has been insufficient, meaning hard-pressed councils having to decide who should benefit from the grants. The majority of start-ups, tech, and boutique businesses operate from shared premises, where rent, utilities, and business rates are included in the rent.
Deputy mayor of Bristol, Craig Cheney said, the Bristol area had at least 1,700 businesses in shared workspaces but only had £3.5 million to allocate. He further said that he would need £17 million to allocate grants to all the eligible businesses. “We have got 400 market traders and we estimate 110 B&Bs. It is going to be hard to administer,” he said.
The city has over 20,000 businesses that operate with less than 50 employees, yet only 7,000 have received financial support from the government.
Yesterday, the Bristol council opened applications for two weeks but hasn’t determined what basis to allocate the money.
Businesses that are registered for business rates are eligible for a £10,000 or £25,00 grant which is depended on the size or sector they operate in. This funding is separate £12.3 billion pot from the government.
The new scheme was intended for the small businesses which were missing out.
Matt Griffith who is the director of policy at business West, the chamber of commerce for the West Country, voiced his disappointment by the government’s approach for the scheme.
He said, “the government has, knowingly, severely underfunded this package and overloaded with other eligible groups – meaning it is bound to lead to thousands of businesses not getting access to support they desperately need.”
The grant scheme does not include the self-employed who have many high fixed property costs described by Mr Griffith as “unfair.”
He went on to add that many businesses may not reopen once the lockdown is completely lifted. Adding that the many workspace businesses have fallen through the gaps in support.
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The UK gov must do more to ensure small businesses survive the economic downturn!