Councils in England begin to offer new business grants but warn funding is limited

Councils across England has begun to accept applications for the new Local Authority Discretionary Grants Fund (LADGF) which prioritises businesses with fixed property costs.

Announced on 2 May, LADGF is aimed at businesses that haven't been able to access the government's local grant schemes for firms that pay business rates or get business rates relief.

The new scheme targets businesses in shared workspaces, market traders, bed and breakfasts and charity properties although councils are able to extend the grants to other similar companies.

Total funding is £617m but with 343 councils in England, the amount of grants available is low compared to the amount of businesses likely to be eligible.

Speaking to the Financial Times, Craig Cheney, Bristol's deputy mayor, said the city has been allocated £3.5m from the new fund but it estimates there are 1,700 businesses in shared spaces, 110 bed and breakfasts and 400 market traders that could qualify. For them all to receive £10,000 grants, £17m would be needed.

Other councils have also complained that the funding is too limited.

Rae Evans, a councillor in Telford & Wrekin which has been allocated £1.47m and opens for applications on 25 May, told the Shropshire Star: "We are deeply disappointed because the conditions set by government and the limited value of the funding provided, offers too little help to too few businesses. It feels like we're being set up to fail.

"The government's criteria essentially leaves many manufacturers high and dry, while we expect applications to quickly outstrip the fund's value, meaning that many businesses in real need will not get the help that they so badly require."

Under the government guidelines, businesses that are eligible for other grants, including the Self-employed Income Support Scheme (SEISS), cannot receive funding through the new scheme, an issue which campaigners have criticised.

[UPDATE 23/05/20: The government has announced that businesses eligible for SEISS can now access the Local Authority Discretionary Grants Fund]

For the original businesses rates scheme, £12.3bn was provided to councils in England but many say eligible businesses still haven't applied. A petition has been launched calling on the government to let councils use the £2.5bn still to be given out to support other businesses including events companies, driving schools and businesses working from home.

Local Authority Discretionary Grant Fund applications

The government has allowed councils to offers grants of £25,000, £10,000 and any amount under £10,000 through the LADGF. Some councils have launched the application process for grants with different approaches taken for the level of funding provided.

For example, Wakefield Council has opened the scheme and is providing market traders with £2,500 grants, charity properties and B&Bs with £5,000 and small businesses in shared offices with £2,500, £5,000 or £10,000 depending on their rent.

Hull Council is also taking applications and said: "Micro, small businesses and charities with low turnovers, staff numbers and fixed costs will receive a grant of under £10,000 unless there is a compelling case to pay more."

Cornwall Council has opened for applications and said it will provide funding to the priority businesses during a one week first phase. After that it will open up support for other small companies that haven't been able to access support, have been impacted negatively by COVID-19 and have high fixed costs.

The council added: "We will continue to lobby the government for additional funding so that we can assist even more businesses."