Minutes:
Alicia Munday, LBB Interim Assistant Director of Culture and Regeneration attended the meeting to provide information regarding the current business grants.
The LBB Interim Assistant Director of Culture and Regeneration advised members that the team were administering 11 various business grants, and, through support grants, had delivered over £105m to businesses in the Borough. The grants were divided into two areas – mandatory grants, with criteria set by the government, for which the Council facilitated payments; and discretionary grants, for which the Local Authority set the criteria within a national framework.
Mandatory grants were administered directly by the Council’s Exchequer Services, whereas the discretionary grants were co-ordinated by the Business Support Team. The first discretionary grant scheme had been administered in summer 2020 and had seen £2.275m distributed (from an allocation of £2.4m) to 178 businesses. In line with government requirements, just over £120k was returned. It was noted that the aim was always to have no grant monies returned, but if the grant could not be distributed within the timescale set, this was the legal requirement.
The Local Authority had received 287 grant applications, and of the 178 grants paid out: 73% went to Limited companies; 5% to partnerships; 2% to charities; and just under 20% to sole traders. The administration of grants at this level was an entirely new concept for the Public Sector – the team had worked with partners to share ideas and best practice, and were supported by a senior officer board which included the Director of Finance, the Director for Housing, Planning and Regeneration, the Chief Auditor and Finance officers.
The most recent grants announced by the government were the Additional Restrictions Grants (ARG), which for Bromley equated to just over £6.6m. Addressing feedback received in relation to the time taken to distribute the ARG, the LBB Interim Assistant Director of Culture and Regeneration advised that the fund had been announced by the government in November 2020, for which it took a further two weeks for guidance to be received. Once the grant amount was confirmed, in direct response to the criteria used in the summer, the team had undertaken work to find out the needs of business via round table events and online surveys. Due to the overall value of the ARG, a report was required to be drafted and presented to Elected Members for consideration of the proposals. This had taken place over the Christmas period, and the Leader of the Council had taken an urgent decision in January 2021. At this point, the team could start commissioning the development of the systems needed to administer the grants. This was extremely complex, and it was noted that all risks, including fraud, sat with the Local Authority. Work was being undertaken with a team of developers, who were working on similar projects across the country and in great demand. Despite this, within two weeks of approval, two schemes had gone live. The independent bars and public house scheme went live the previous week and had a ringfenced total of £1m. Grants were based on business rates, or for those that were exempt, a lumpsum of £3k would be allocated. It was noted that around 20 applications had already been received. The hardship grant scheme had gone live that afternoon, which would provide support to local businesses and those, such as sole traders, whose income had been directly impacted by the pandemic.
The LBB Interim Assistant Director of Culture and Regeneration informed members that a further three schemes were in development: a £1m innovation fund (which it was hoped would be available in mid-February 2021); the distribution of a top-up payment scheme; and an enterprise hub. In addition to this, it was anticipated that Phase 2 of the grants would be considered by the Council in February.
The team was working to make the Business Support section of the Council’s website easier to use, and as clear and concise as possible. However, they were still having to process a large number of applications that did not provide the correct evidence, and some that were clearly not eligible. For this round of grants, some constraints had been added, such as only attempting to contact a business twice for further information before their application was withdrawn – the team were doing everything they could to communicate this to businesses. It was noted that the government had listened to feedback, and was allowing Local Authorities until March 2022 to use their full allocation of the ARG. The Council had a clear agenda relating to this, which was for the local economy to prosper long after the pandemic, and the team were working with businesses to target the best use of the grants.
John Coupland, South East London Business Network (SELBN) noted that there had been a number of communications between himself and the Business Support team, particularly in relation to the concerns raised at the last meeting regarding sole traders, and thanked them for their help so far. Mr Coupland asked for clarification regarding the balance of the discretionary grants returned to government, as he had understood that there had “not been enough money to go round”. The LBB Interim Assistant Director of Culture and Regeneration responded that the Council could always utilise more funding if it was received, and highlighted that it was never the intention to return funding to central government if they did not have to. However there had been the need to find a balance between increasing the threshold each time, and there being enough money “left in the pot” and time for it to be distributed. This had been fed back to government, and in response they had given a much greater timescale for the ARG to be utilised. It was noted that some grants were received at short notice and had tight deadlines which added to the complexity.
Mr Coupland noted the update regarding the hardship grant that had gone live that day and enquired as to how it would be communicated. The LBB Interim Assistant Director of Culture and Regeneration advised that the scheme had only gone live within the last half an hour. The following day a press release would be published, and information would be circulated via the Business Support e-bulletin, to which businesses had been encouraged to sign up.
Christopher Evans, Community Links Bromley asked if there was any data regarding unsuccessful applications for discretionary grants, particularly in relation to the charitable sector. The LBB Interim Assistant Director of Culture and Regeneration advised that 12 applications had been received from charities, of which 5 had been awarded a grant allocation. The remaining 7 had not been eligible, which may have been related to them not having the overheads necessary to warrant a successful application.
Lee Thomas, Fairlight Group highlighted that in order to be eligible for discretionary grants, the Local Authority had required a business to show a dip in their turnover within the first two months. As not all businesses would see the full impact of the pandemic happen immediately, there would have been a large number of businesses that would not fall into Bromley’s eligibility criteria. It was questioned why this had not been amended, particularly if there was a balance of £120k. The LBB Interim Assistant Director of Culture and Regeneration responded that the criteria had been set with the best of intentions, at that particular point in time – however the length of the pandemic had not been known, and in hindsight things may have been done slightly differently. The scheme had been taken to its limit with regards to eligibility, with the BR threshold being increased each time. There had been no further time to introduce additional criteria, and government guidelines had been strict with regards to the return of any unallocated funds. It was noted that the hardship grant would support businesses affected by seasonal effects, as any three months could be selected (and did not have to be consecutive) to evidence a loss of income of up to £10k.
Mr Coupland, South East London Business Network (SELBN) noted that in relation to the first round of discretionary grants, he had put in writing to the Local Authority that he questioned the guidelines provided, as they had not been written with sole traders in mind. It was hoped that lessons would be learnt from this, as it was felt the balance returned to government was unacceptable and could have been used to help this group.
RESOLVED that the Business Grants Update be noted.