Anger at £11m government funding snub for businesses

Brighton & Hove City Council has expressed anger and frustration at the government’s refusal to adapt its funding rules and allow local businesses to benefit from around £11m of desperately needed financial support.

The £11m is money the council has already been given by the government to allocate to local businesses.

Back in April the government gave the council £83m to distribute to local businesses. They then asked us to distribute £73m of it in small business grants based on a strict funding formula.

Due to business closures and other factors around eligibility the council was only able to allocate around £68m. 

The council has also given out around £3.7m in discretionary grants to more than 300 local small businesses. 

However, inflexible government rules are now stopping the council from allocating the remaining £11m through more discretionary grants.

Demand for these vastly outstripped the money available. Over 900 small businesses applied, leaving more than 600 seeking grants amounting to £7m.

Council leader Phélim Mac Cafferty said: 

“Essentially, we have learned that the Government will not allow councils like ours to redistribute unspent parts of the grant designed to support local businesses. This is money that could be used to reinvest in local businesses who need it.

“We are desperate to give out the other £11m to support businesses in our city at this difficult time – yet we are being asked to hand this funding back. 

“We know from the many local businesses who have been in touch that they are very frustrated by this. We thank local businesses for their feedback. So many have also expressed their understanding that Covid-19 pressures means the council cannot cover these costs alone through its own budgets. 

“We will continue to lobby the government to think again about this, and to help us give our businesses the support they so desperately need. 

“Being able to use money already allocated for this seems a common-sense approach, when we know so many businesses are in need of financial assistance.”

The leader of the council’s Labour Group, Councillor Nancy Platts, said: 

“According to the Local Government Association, across the country more than a billion pounds of emergency Covid-19 funding that was announced to support businesses will not be used to support businesses after all.

“Jobs and livelihoods must always come first. People have put their heart and souls into their businesses, they have invested their own time and money to contribute to the local economy.

“And now more than 600 businesses in Brighton & Hove are being let down by the Government.”

Among the 20 local business organisations supporting the call for the government to take urgent action are: the Brighton & Hove Economic Partnership; the Federation of Small Businesses; Wired Sussex and the Brighton Restaurant Association.


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