Covid support funding for hard hit firms still uptapped by many

Almost 18 months after it was first launched only half of all councils in England have started making payments to Covid-hit firms from a £1.5bn Government support package.

In March 2021, the Government said that businesses affected by Covid-19 outside the retail, hospitality and leisure sectors – and so not eligible for the pandemic business rates’ holiday – wouldn’t be able to appeal against the property tax citing covid as a Material Change in Circumstance.

However, to cushion the financial blow it announced a £1.5bn business rates’ relief fund. Following a FOI request it has now been discovered that hundreds of millions of pounds remain unpaid with less than two months being left before the scheme’s deadline.

The FOI request went out to 309 councils in England resulting in 207 responses. It could mean thousands of companies miss out on almost £700m of available funding. Just over half, 119 councils, said they started making any payments to businesses.

Chancellor at the time Rishi Sunak gave councils the responsibility to hand out the relief to businesses which applied to the Covid-19 Additional Relief Fund (CARF).

Of the Councils which responded to the FOI and had started to distribute payments, these accounted for £632m of the £1.5bn funding package, but collectively they had paid out just £329m. If this trend was extrapolated across England’s remaining councils, a maximum of £820m from the total £1.5bn available would have been handed out.

The Government claimed CARF was the fastest and fairest way of getting support to businesses that need it the most with a Government spokesperson stating: “The Government has provided an unprecedented package of support for businesses, including a total of £26bn in grants to those affected by restrictions put in place to tackle Covid-19. Councils are responsible for allocating funding and targeting it to businesses, based on local circumstances.”