Business leaders in England have warned that companies are running out of money after being unable to access the £5bn of “restart” grants in time for the easing of lockdown restrictions this week.
At the Budget in March, UK chancellor Rishi Sunak said thousands of shops, pubs, restaurants, gyms and salons hit hardest by the pandemic in England would be “helped back on to their feet” through the support scheme.
Almost 700,000 companies are eligible for cash grants of up to £18,000, which the Treasury said would ensure “firms can reopen and get going again as restrictions ease and people return to their high streets”.
But bosses have complained that funds have not arrived in time to cover the costs of making premises pandemic-safe ahead of the reopening of non essential retail, gyms and outside hospitality this week.
Kate Nicholls, chief executive of UKHospitality, said businesses had little spare cash to fund these expenses given many had been closed with no revenue for almost six months.
“We cannot just reopen the doors and start trading. We need to restock and businesses lost many thousands of pounds in opening and closing over the autumn so many were fully reliant on these grants to fund opening this time,” she added.
Chris Jowsey, chief executive of Admiral Taverns, which operates about 950 pubs, said the “vast, vast majority” of the company’s tenants had not received grants. “It’s causing real strain. There are people in tears because they have literally run out of money.”
Emma McClarkin, chief executive of the British Beer and Pub Association, said many local councils had bureaucratic grant application processes, leaving businesses uncertain of when or if they would receive any money.
“It makes a mockery of the intention of the chancellor to support businesses. We would implore — and it is that desperate — those councils with funds sitting in their banks to ease that process to getting those grants,” she said.
Craig Beaumont, chief of external affairs at the Federation of Small Businesses, said: “These are restart grants, and yet businesses trying to restart are not yet getting the financial support they desperately need.”
Local authorities complain that the checks required for restart grant applicants — including bank account checks — are stricter than for other Covid-19 support schemes.
The Department for Business, Energy and Industrial Strategy has asked councils to pay applicants by July 31.
It said: “We have written to the leaders of 314 councils in England urging them to do all they can to pay out grants money more quickly and ensure businesses in their local authority area get the support they need.”
The problem has been acute for high street travel agents, many of which have not received funding and have been classed along with retail for lower grants despite international travel being all but banned.
While hairdressers, which have seen queues out of the door since reopening this week, have been able to claim up to £18,000, support for travel agents is capped at £6,000.
“With the lack of certainty about any restart and the actual take-up by clients of travel, we felt let down,” said Richard Slater, managing director of Henbury Travel. “Quite a few agencies are not reopening because of the lack of support.”