Call for council to get unused business support cash

In March, the Chancellor Rishi Sunak announced grants of between £10,000 and £25,000 for small and medium-sized businesses to support them through the pandemic and South Tyneside Borough Council had paid £24.8m to business properties in the area by August 9, the latest Department for Business, Energy and Industrial Strategy figures show.

That is 88% of the money available for the borough and – with just days left for local firms to claim the remaining £3.4m – the Local Government Association says councils should be able to keep any leftover cash to revive the local economy.

The LGA say the Government has told councils it will shut the schemes – the Small Business Grants Fund and the Retail, Hospitality and Leisure Business Grants Fund – on August 28 and any unclaimed funds will need to be returned.

Councils across England had paid out 88% of the fund's £12.3bn by August 9 – which means £1.5bn may still be available.

Richard Watts, chairman of the LGA’s resources board, said: “The Government needs to commit to redistributing any unspent resources from the original schemes, including any clawed back, to councils to be spent on local efforts to help further support businesses and reboot local economies.”

A third Local Authority Discretionary Grant Fund worth up to £25,000 was launched in May for small and micro businesses that are not eligible for the other schemes, and also closes on August 28.

Fiigures show £770,000 had been paid out to South Tyneside businesses through the fund by July 5.

The Federation of Small Businesses is calling for another round of the discretionary grant – worth up to £617 million – to be issued to councils.

A BEIS spokeswoman said: “Around 92% of eligible small businesses nationally have now received government grants totalling almost £11 billion, as part of a wider package of support for businesses worth £160 billion. We are working with local councils to ensure funds get to as many eligible small business owners as possible.”