Millions meant for struggling Yorkshire businesses 'could be sent back unspent'

Millions in discretionary grant funding aimed at saving struggling businesses that ‘fell through the cracks’ could be sent back to the Treasury unspent, politicians have claimed, under “obtuse criteria” which deemed many hopeful applicants ineligible.
The discretionary fund was launched by Business Secretary Alok Sharma in May to accommodate certain small businesses previously outside the scope of the business grant funds scheme.The discretionary fund was launched by Business Secretary Alok Sharma in May to accommodate certain small businesses previously outside the scope of the business grant funds scheme.
The discretionary fund was launched by Business Secretary Alok Sharma in May to accommodate certain small businesses previously outside the scope of the business grant funds scheme.

Leeds City Council (LCC) was allocated nearly £7.8m to distribute in these grants, but has now faced criticism over a policy requirement for businesses to have ‘non-domestic’ office premises, while many are registered from home or trade online.

The deadline for business owners to apply for the discretionary grant funding passed on Friday, and any remaining sums, unspent in part due to ‘fear of fraud’, will be sent back to Westminster at the end of September.

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An LCC spokesperson said that £3m of the discretionary budget has been paid out and remaining applications will be processed by the end of the month.

But Conservative Coun Matthew Robinson, representing Leeds’ Harewood Ward, fears more than half of the budget may be sent back unspent.

“I know of about 100 businesses in Leeds that have fallen through the cracks and this discretionary grant was meant for them but it is not going to them,” he said. “I fully appreciate that local authorities don’t want to be defrauded, but it feels even worse to know that millions of pounds that should have gone to businesses risks going back to the Treasury.”

'Infuriating'

One business owner labelled the criteria as “obtuse” and told The Yorkshire Post it was “infuriating” that he might be forced to apply for universal credit while the prospect of lifeline funding may be sent back to Westminster.

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It is understood that city councils lobbied central government to award them these funds on the basis that devolved powers would have a superior understanding of the local economy, and LCC insists its criteria followed government guidelines to support smaller businesses with primarily ‘fixed property costs’.

However, Coun Robinson criticised the city council’s ‘non-domestic’ office premises criteria, when neighbouring authorities such as Bradford have extended the scheme to include home-based businesses with identifiable property costs.

“Imagine the discretionary fund grant is like a hoop to be jumped through, except it has been set on fire and is a moving target,” he said. “So businesses risk missing out and that’s not what the Government’s funding was intended for.”

Alec Shelbrooke, Conservative MP for Elmet and Rothwell, said the ruling administration has “failed” to support businesses in need of this money.

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“I have tabled a Written Question to the Treasury on this matter in case the council fails to change its policy before the money is returned to the Treasury, but this is a matter that should be rectified by the local authority.”

Council response

In a statement, Leeds City Council said over £150m in support has been paid out to more than 12,000 businesses in Leeds through grant schemes.

“We understand the challenges and issues facing home-based businesses who have not qualified for any grant support to this point, and would be keen to speak to them to offer as much guidance and support as we can during this difficult time.

“On the Discretionary Fund the council has followed government guidelines to support smaller businesses with primarily fixed property costs, with a further £3m being paid out to almost 500 such businesses and the basic requirements reduced to ensure more businesses qualify.”

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