The truth behind the Lib-Dems claims of £15m in unused small business support grants
During the ongoing Coronavirus crisis the Government have handed out a variety of grants for local businesses, mainly through local Councils, in the form of the small business grants fund and the retail hospitality and leisure business grants fund.
Sheffield itself was allocated £113m through these grant schemes and handed out over £98m of this total in funding.
The remaining £15m, that wasn’t handed out before the August deadline, seems to be the cause of a great deal of confusion, thanks in no small part to a recent social media post featuring an online video of Lib Dem Cllr Shaffaq Mohammed asking about its whereabouts in a recent Council meeting.
Sheffield Council estimated, prior to the £113m fund opening for applications, that between £95m-£98m would be allocated to local businesses based on the Ratings list as of the 1/4/20 and, more importantly, based upon the Governments exhaustively restrictive funding criteria which left quite a significant number of businesses unable to qualify for the grants.
As of the August closing date for applications Sheffield Council had allocated approximately £98m to local businesses.
It has been alleged by Cllr Mohammed that Sheffield Council are at fault for not allocating the full £113m by not doing enough to let local businesses know they were eligible for the grants, and yet prior to the August deadline Councillor Mazher Iqbal, Cabinet Member for Business and Investment at Sheffield City Councilwas quoted in the local press saying “We have emailed and written directly to any remaining businesses we feel may be eligible to apply and would strongly encourage anyone who feels they might be eligible to apply before the deadline.”
Sheffield Council handed out 87% of their total allocated funding under these grant schemes to local businesses. Cllr Mohammed claims this figure should have been higher and was quoted in the local press, at the time of the August deadline, as saying “It is the thing I was fearing most, that money coming to Sheffield is not being spent when other places have already spent their money.”
Unfortunately this comment doesn’t quite stand up to further scrutiny. We’ve already established that Sheffield Council distributed 87% of its full grant allocation under these schemes and when we look at neighbouring areas we see similar percentage figures in terms of take up of these grants.
Rotherham – 86% allocated
Doncaster – 84% allocated
Nottingham – 84% allocated
Manchester – 84% allocated
This pattern is one that, at the time of the August deadline for these grants, was repeated throughout the country. In fact over a billion pounds in unused grant money was given back to the Government, not because the local Councils didn’t try hard enough to distribute this money to local businesses but because the Governments own funding criteria was too restrictive and left many businesses throughout the country without the support they desperately needed.
It should also be noted that in Sheffield a further separate £5.6m in funding was distributed by Sheffield Council in the form of the discretionary business grant to businesses that didn’t qualify for the main business grants highlighted above.
In conclusion it would appear that the Lib Dem Cllr Shaffaq Mohammed has got his facts wrong. Sheffield Council did try to distribute as much of the grant funding as possible to local businesses before the August deadline. The unallocated grant funding did not occur because of Council inaction, in terms of notifying potentially eligible businesses, and was in fact a by-product of the Governments own restrictive eligibility criteria, a problem that was replicated nationwide – with 1.3 billion not spent!
As for the remaining £15m in unused funding, whilst this currently still sits in the Councils account awaiting transfer back to the treasury, it cannot be touched or used for other purposes.
Could it be possible that the Liberal Democrat Councillor is trying to gain a great deal of political mileage by laying the blame for the £15m in unused grant funding at the feet of the Labour run Council rather than aiming his anger towards the true culprit, the Government, for their restrictive funding criteria which rendered many local businesses ineligible for this funding? If so this does a great disservice to the local businesses within Sheffield who missed out on funding because of these restrictions and deserves calling out to the fullest extent.