// Government grant schemes to close: retailers have until August 28 to get their claims dealt with
// Experts at Colliers call redistribution of £1.5bn “unspent fund” to support retailers that have “fallen between the cracks”
The UK Government has confirmed that that three special grants created to help retailers and other businesses suffering the impact of Covid-19 will close on August 28.
The grants in question are the Retail, Hospitality and Leisure Grants Fund (RHLGF), the Small Business Grants Fund (SBGF), and the Discretionary Grant Fund (DGF) – all of which are allocated to local authorities to pay businesses that need help.
According to property experts at Collier International, the confirmation of grants’ end date comes despite the fact that many retailers are still struggling to receive their grant funding due to delays in the system.
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As a result, Colliers said any business eligible for the grants should make their claim now, well before the cut off date.
The RHLGF and SBGF were set up on March 23 as the country went into lockdown, and were supplemented by the DGF set up in May to help plug the gap for businesses struggling to access the initial funds.
According to data published by the UK Government, £1.58 billion of the grants funds are still unspent and yet to be distributed.
In response, Colliers International is calling for this “unspent fund” to be distributed to those small businesses, retailers and hospitality businesses that have fallen between the cracks and have not received grants either from any of these schemes.
“We have had a bizarre scenario where there are some areas of the country with still ‘too much grant’ to pay out, such as Cornwall who has paid out £235 million of its whopping £281 million grant but other parts of the country where the grant allocations were simply not big enough,” Colliers head of business rates John Webber said.
According to government figures, as of July 13, of the £12.33 billion originally allocated in the grant schemes some £10.75 billion or just over 87 per cent has been paid out, leaving 13 per cent – the £1.58 billion “unspent fund” – still undistributed to businesses.
This has been primarily because of EU State Aid Rules which stopped some businesses with multiple properties from accessing all the grants, particularly retailers with multiple stores.
There have also been some parts of the country where not all businesses have claimed the grants, others where the grants were too restrictive to really help, especially when they were based on rateable values.
“It’s been a postcode lottery as to how and if a business actually managed to benefit from these grants,” Weber said.
“In terms of the discretionary grant fund, businesses also had to evidence a loss of income resulting from Covid 19 to receive grant monies, and different boroughs gave different deadline dates and conditions for applications. It’s been confusing and inconsistent.
“Now the government has announced the end of all the grant schemes, we urge any retailer or hospitality business to get their claim in as soon as possible.
“The VOA is under resourced at the moment and there are some delays in claims being processed.
“The deadline date of August 28th may mean many may run out of time to claim.
“We are therefore petitioning that the government takes this into account and rather than return unused grant monies to BEIS, it redistributes the £1.58 billion left to support those businesses, who have still missed out on funds so far, or reconsiders the hard deadline.
“Supporting our retail and hospitality businesses are vital if we are to get the UK economy back on its feet.”
The grants are different to the government-backed Coronavirus Business Interruption Loan Scheme (CBILS), which allows businesses to borrow up to £5 million from their bank.
The loans are provided by high street banks, but backed by an 80 per cent government guarantee – meaning the Treasury shoulders most of the risk should the business not be able to pay back what it borrowed.
Yesterday, the government extended access to CBILS to businesses in deep debt, after ministers and industry groups pushed for changes to the rules to allow small and independent retailers that are not insolvent to access the scheme.