Local councils to get extra £617 million towards business grants; MPs demand to ‘raise the bar’ on rates for wider access

The government said it will make an additional £617 million available for local authorities to accommodate certain small businesses previously outside the scope of the business grant funds scheme.

However, campaigners said the amount still falls short of the need and asked the chancellor to increase the rateable value threshold for the Retail, Hospitality and Leisure Grants Fund (RHLGF) to £150,000, from the present £51,000.

Business Secretary Alok Sharma and Local Government Minister Simon Clarke on Saturday (2 May) announced an additional 5 percent uplift to the £12.33 billion funding previously announced for the Small Business Grants Fund (SBGF) and the RHLGF.

Small businesses, with less than 50 employees, that suffered a significant drop of income due to Coronavirus restriction measures can avail grants up to £25,000 from this ‘discretionary’ fund.

The government said over £7.5 billion – 61% of the grant funding – has been paid out to over 614,000 business properties via the SBGF and RHLGF schemes as of 27 April.

Campaigners, however, said around 55,000 businesses across England and Wales are currently unable to access the RHLGF due to their business rates valuation falling between £51,000 – £150,000.

As part of the RHLG guidance, only those in the retail, hospitality, leisure and assembly sectors with a business rates value of up to £51,000 can access the grant.

They also noted that the ‘discretionary fund’ to local authorities falls short of £748 million to help businesses in need.

The #RaiseTheBar campaign estimates a maximum of £1.36 billion in government support is needed to enable the RHLGF to support all 54,638 businesses falling within a business rates threshold of £51,000 to £150,000.

“Access to the RHLG grant is a ticking time bomb for tens of thousands of businesses on our high streets and in our local communities,” said Matthew Sims, chief executive off  Croydon BID and co-founder of #RaiseTheBar campaign.

“There are just eight weeks until rent is due and the prospect of going under is an uncomfortable truth the government needs to hear and act upon now. The consequences of failing to increase the business rates threshold are too grim to bear.”

Several MPs have now joined the cause, the latest move being an open letter from 86 Conservative MPs to Chancellor Rishi Sunak calling for the business rates threshold to be increased.

Earlier, Shadow Chancellor Anneliese Dodds has written to the chancellor, detailing the urgent need to raise the threshold above £51,000 due to businesses operating in high-cost areas. Lucy Powell, MP for Manchester Central, has called for the business rates threshold to be increased in Prime Minister’s Questions on 22 April.

The campaign has also been able to garner support within the government, with Foreign Secretary Dominic Raab passing the request onto the Treasury following local concern in his constituency Esher and Walton.

Health Secretary Matt Hancock has committed to discuss the need during the daily government briefing on 27 April.