Councils sitting on £1bn of unspent Covid grants

Local authorities still have £850m worth of Covid grants worth up to £6,000 owing to hospitality pre-Omicron to distribute plus another £350m unspent from previous pandemic financial support

Councils are sitting on £850m worth of Covid grants for hospitality businesses that had to shut because of Omicron.

Plus there is another £350m worth of Covid grants still unspent from previous rounds of Covid-19 small business grants.

Last December the Government announced a £1bn package of one-off grants worth up to £6,000 per premises for businesses in the hospitality and leisure sectors as part of its omicron business support – worth a total of up to £683m for England alone for an estimated 200,000 businesses.

The Omicron Hospitality and Leisure Grant scheme provided one-off cash grants of up to £6,000.

Mike Cherry, national chairman of the Federation of Small Businesses, said: “Close to a billion pounds worth of business support grants for those most in need are still yet to reach them. It’s exasperating to see that, after all this time, some authorities still haven’t got their houses in order.”

It may be that hospitality businesses have to wait until March before they see the Omicron support grants in their bank accounts.

Cherry told The Times that with small businesses facing a huge hike in national insurance and increases in business rates bills from April, “this can’t come soon enough”.

There are huge disparities between local authorities as to the proportion of Covid-19 grants distributed, acording to the FSB. Councils in the southwest have distributed only 4 per cent of the available funds, on average, while those in Yorkshire and Humber have spent 21 per cent of their grant allocation.

Local authorities counter that these grants are “unclaimed rather than undistributed” and that they are having to deal with multiple timeframes when grants were distributed, combined with anti-fraud checks.

Kwasi Kwarteng, the business secretary, has told local authorities to disburse any remaining funding, while Paul Scully, the business minister, has urged councils to quickly get the Omicron grants to companies.

Further reading

Businesses struggling to repay £20bn of Covid loans

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Tim Adler

Tim Adler is group editor of Small Business, Growth Business and Information Age. He is a former commissioning editor at the Daily Telegraph, who has written for the Financial Times, The Times and the...

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