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Subject: |
Covid 19 Supplementary Support Grants for Business |
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Date of Meeting: |
4th February 2021 |
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Report of: |
Executive Director Economy, Environment and Culture Executive Director Housing, Neighbourhoods & Communities |
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Contact Officer: |
Name: |
Cheryl Finella |
Tel: |
01273 291095 |
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Email: |
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Ward(s) affected: |
All |
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FOR GENERAL RELEASE
1. PURPOSE OF REPORT AND POLICY CONTEXT
1.1
This report provides an update on the £5.818m Covid 19
Additional Restrictions Grant (ARG) for Business allocated to the
council in relation to the November lockdown and the work that has
taken place to administer the funds under the delegated powers of
the Executive Director for Economy Environment and Culture which
were approved by a Policy & Resources (Urgency) Sub-Committee
on the 13 November 2020.
1.2 This report sets out proposals for the allocation of an additional £2.584m of top-up ARG funding received from government on the 15 January 2021 in relation to the current lockdown period which started on 5 January 2021. Recognising the need to distribute vital funds to business, this report is seeking member approval for a series of measures to provide top-up payments to any eligible businesses. It also proposes support for essential public facing services that have, thus far, had limited access to government funds. The report details support for taxi drivers and for nurseries. As with the scheme in November, the proposed approach is intended to enable speedy decision-making whilst also ensuring probity and appropriate diligence for public funds.
2. RECOMMENDATIONS:
2.1
That members note the progress being made to administer the
£5.818m Additional restrictions grants, under delegated
powers, relating to the 5 November 2020 to 1 December 2020 lockdown
period, and the subsequent Tier restrictions.
2.2
That members agree to delegate authority to the Executive Director
Economy, Environment & Culture, in consultation with the Acting
Chief Finance Officer, to determine the criteria and agree
processes for issuing the Additional Restrictions Grants using the
£2.584million top-up recently provided by government, taking
account of the need to issue the grants as quickly as possible
whilst targeting key local sectors that are affected by the new
lockdown.
2.3 That members agree to delegate authority to the interim Executive Director Housing Neighbourhoods & Communities, in consultation with the Acting Chief Finance Officer, to determine criteria and agree processes for issuing payments to Brighton & Hove licensed private hire and Hackney Carriage drivers.
3.
CONTEXT/ BACKGROUND INFORMATION
3.1 When the second (November) national lockdown was declared the government announced the introduction of additional support measures for business during the lockdown period, including the Local Restrictions Grant (closed); and the Additional Restrictions Grant. As explained later in this report the Local Restrictions grant payments are directed by government while the Additional Restrictions Grants offer some flexibility to local authorities.
3.2 The council is alive to the well-publicised concerns from businesses that have been left out of the current grant schemes and is using all the discretion allowed by government to support local business. The government has however, made clear that the grant cannot be used to support loss of income; the council must be able to evidence that payments relate to the ongoing costs that a business incurs and not as a wage subsidy.
3.3 In line with government guidance, the city council has used the Additional Restrictions Grant to help those businesses which, while not legally forced to close, are nonetheless severely impacted by the restrictions put in place to control the spread of COVID-19. This includes businesses which supply the retail, hospitality, and leisure sectors, or businesses in the events sector. We have also offered help to businesses outside of the business rates system, which are effectively forced to close, for example market traders.
3.4 The Additional Restrictions Grant is finite and, in considering how to make best use of this discretionary grant, the Council has sought to focus on the ongoing sustainability of local businesses; offering grants to businesses that intend to re-open after the pandemic.
3.5 The aim of the fund is to support business that have been significantly impacted by the restrictions placed on them. Brighton & Hove has one of the highest levels of micro businesses (businesses with less than 5 employees) than the national average. Many operate with the arts & culture, events & hospitality sectors. Hospitality alone accounts for over 14,000 jobs and the performing arts accounts for c£329m.
Grant to Businesses from November 2020
3.6 On the 31 October 2020 the government announced a second national lockdown. On the 4 November 2020 government issued guidance to local authorities detailing the parameters for allocating grants to businesses with a rateable value known as, Local Restrictions Support Grants (LRSG). The government also allocated £5.818m of discretionary grant funding, to the city council known as the Additional Restrictions Grant (ARG). This discretionary grant is intended primarily to support businesses that are not eligible for the main grant fund but are significantly impacted by the Covid 19 business restrictions.
3.7
At the Policy & Resources Urgency Sub-Committee members agreed
to delegate authority to the Executive Director for Economy,
Environment & Culture, in consultation with the Acting Chief
Finance Officer to determine the criteria, agree the processes for
the allocation and award of ARG.
3.8
The government went on to provide a further six grant schemes to
assist businesses from 1 November 2020 onwards. Details
of all these schemes are fully explained on our website here
https://www.brighton-hove.gov.uk/coronavirus-covid-19/businesses-and-employers
and,
https://www.brighton-hove.gov.uk/how-apply-covid-19-business-support-grant
and in Annex One of this report.
Local Restrictions Support Grants (LRSG)
3.9 Of the six grant schemes, four; the Local Restrictions Support Grant (closed), Local Restrictions Support Grant (sector), Christmas Support Payments and Closed Business Restriction Payments are fixed schemes. Which means that the grant amounts to business are set by government. The Council is delivering these in accordance with government criteria, the subsequent guidance, and the addendums that followed. In combination these grants have provided the bulk of the financial support during the Tier 4 and lockdown periods. As at 29 January 2021 the total amount paid on these grants was £25.073m.
3.10
The other two grants; the LRSG (open) and Additional Restriction
Grant (ARG) are discretionary funds for the Council to distribute,
although they too are subject to government guidance and criteria
which strongly direct the Council as to their use.
3.11
The guidance regarding the LRSG (open) effectively directs the
council to follow a suggested scheme and award levels, with only a
small margin of flexibility. This direction does align with
the Council priorities and the scheme that the Council has
published closely resembles the suggested scheme with a couple of
additional categories and top ups to ensure we spend the funding in
full. This scheme only applies to the period the city was in Tier
2, from 2 December to 25 December 2020.
3.12
This scheme has been slightly revised since the update report to
Policy & Resources Recovery Sub-Committee 6 January 2020,
(reference: paragraph 3.8.19 of that report). There has been
a higher than anticipated number of businesses eligible for support
during this period. This means that there will not be enough
contingency in the main fund to contribute to the top up amount
being paid for this period. The top up will therefore be
fully paid from the ARG fund. This change does not alter the
amount the businesses are receiving.
3.13
The Council has prioritised getting the maximum number and amount
of payments out to businesses. The main lockdown grant, the
Local Restriction Support Grant (closed), has the most recipients
and generates the highest awards so this has been prioritised.
However, there is a disparity between those eligible for the Local
Restrictions Grants and those eligible for the discretionary fund.
This report seeks to address this disparity through the development
of additional payments to those eligible for the Additional
Restrictions Grant and, through the extension of the funding
eligibility to include licenced taxis and Early Years
providers.
Additional Restrictions Grant (ARG)
3.14
The ARG is a discretionary scheme with a higher level of funding
and greater degree of flexibility. When the ARG scheme was
first announced, the Policy & Resources Urgency Sub-Committee
on 13 November 2020 approved a proposal for an initial ARG process
to respond to the second lockdown period 5 November to 1 December
2020. Discretionary powers were approved for the Executive
Director of Economy, Environment and Culture to enable distribution
of the £5.818 million. At that stage it was difficult
to predict the degree of take-up expected for this scheme and the
government indicated that there would be no further ARG for the
financial year. It was therefore considered prudent to retain
around 50% of the funds to cover further lockdowns and/or
restrictions for the remainder of the financial year.
3.15 The ARG discretionary scheme for the second lockdown has been designed to ensure that support is provided to those groups that are eligible under the government guidance to receive it.
3.16
First and foremost, it is to be used to support businesses that do
not directly pay business rates but otherwise would be eligible for
support under the LRSG schemes. Beyond that the Council has
licence to distribute it to support businesses, including those
without premises, albeit subject to the specific government
guidance.
3.17
However, although there is more flexibility within the ARG
discretionary scheme, the government has been very clear that
payments to businesses must be in relation to their business
costs.
3.18
ARG cannot be used to support loss of income. This point was
clarified by the Department for Business Energy & Industrial
Strategy as part of their published Frequently Asked
Questions. This excerpt is from that FAQ document:
Why is there a
presumption that under ARG, Local Authorities should not be
supporting the self-employed when so many self-employed and company
directors paid dividends are excluded from SEISS & CJRS? If
Local Authorities were to check that these businesses declare that
the money was to go towards fixed costs would that be acceptable?
Discretionary grants, including the ARG, can be
used to support the self-employed. However, the ARG must not be
used as a wage supplement, rather as a support to the business that
the self-employed person runs. In addition, the Local Restrictions
Support Grant (Closed) is available to support self-employed people
who are liable for business rates.
(Local Restrictions Support Grants and Additional
Restrictions Grant – Frequently Asked Questions (FAQ)
-Extended – Issue 2)
3.19
Due to these limitations the ARG paid for
the second lockdown is lower than initially anticipated. The scheme
for this period will remain open until further notice. The first
ARG payment was for the 27 days from 5 November to 1 December. The
sum of £2,000 was awarded for businesses with high fixed
costs and £500 for market traders and businesses that rented
space within a larger business. The projected expenditure for the
period 5 November to 1 December 2020 is c£1.1m (estimate
based on 600 awards)
3.20
As detailed in 3.2 above, the committee
approved delegated authority to the Executive Director Economy
Environment & Culture to make decisions regarding further use
of the fund in the face of a changing situation where rapid
responses were necessary. These delegated powers were used in
December 2020 when the city moved between tiers, as the levels of
infection escalated.
3.21
In response to feedback from representative
groups highlighting the pre-Christmas pressures on the Hospitality,
Accommodation, Leisure and Events sectors in the city, a decision
was made to award £2,000 of ARG discretionary funding in the
form of top ups to business eligible for LRSG (open) grants.
3.22 In
response to the city moving into Tier 4 and then into the
3rd lockdown a further award of ARG was made to those
LRSG businesses who successfully applied for a grant for the second
lockdown. This award is for the 52 days covering the period, 26
December 2020 to15 February 2021, payable at two levels,
£4,000 and £1,000, effectively doubling the amount paid
for the previous 27- day lockdown.
Proposals for future awards of ARG
3.23
When the 3rd lockdown from 5 January 2021 was announced the
government committed to adding to the discretionary funds
available. As a consequence, the Council received an
additional £2.584m top-up for the ARG fund with a government
imperative to distribute this fund to support local businesses as
soon as possible. There has been no indication from government as
to whether further ARG funding will be provided if the lockdown is
extended or if there are further periods of restriction beyond 15
February 2021.
3.24
This latest lockdown and additional allocation of grant funding
extends beyond the current reach of the delegated authority vested
in the Executive Director for Economy, Environment and Culture and
members are asked to consider the new proposals put forward in this
report. This report seeks approval to make provision to further
distribute these ARG funds to businesses that do not pay business
rates and businesses without premises and to also recognise some
key businesses that require support because of the additional
restrictions required by the current lockdown measures.
3.25 The
proposal is to make provision for a future discretionary payment to
businesses that have received ARG payments for the second and third
lockdowns as a continuation of support for the 6-week period from,
16 February to 29 March if a further lockdown or tier restriction
is put in place. The suggested payments for that period are
£3,000 and £750. However, these awards may need
to be adjusted if the expenditure on other areas are higher than
currently estimated.
Additional Restriction Grant (ARG) – Licenced Private Hire
and Hackney Carriage Drivers
3.26 The
impact of the Covid 19 pandemic is being felt by the city’s
private licenced private hire and Hackney Carriage drivers.
With pubs, bars, venues, indoor
entertainment closed, and people advised to stay at home drivers
have experienced a significant loss in turnover, while still having
to cover key business costs. As a public facing service,
licensed taxi drivers are considered to be in a high-risk group. A
recent report by the Office for National Statistics showed that
Covid-19 death rates among people in jobs such taxi driving were up
to three times higher than the national average.
3.27
Licenced taxi drivers play an important role within the city and
are making a significant contribution to the city vaccination
programme by, for example, transporting residents to their
vaccination appointments.
3.28 The
proposal is for the negative impact on taxi drivers to be
recognised with a specific grant award. The grant will be in
relation to the fixed business costs that drivers incur for their
taxi licence, insurance, vehicle maintenance and Covid 19 safety
measures in this period.
3.29 The
proposal is for a, one-off payment, on application, of between
£250 and £400 to private hire and Hackney Carriage
drivers licensed in Brighton & Hove. There are
approximately 1,300 licensed private hire taxis in the city; the
estimated cost of this award is between £325,000 and
£520,000.
Additional Restrictions Grant Scheme: Early years and
wrap-around childcare Providers
3.30
Early years and wrap-around childcare providers were not
eligible under the criteria for the period 5 November to 1 December
2020 because they were permitted to be open for business during
that period.
3.31 The Government’s lockdown guidance for early years and childcare settings (Education and childcare settings: national lockdown from 5 January 2021 (publishing.service.gov.uk) is that from 5 January:
§ Early years settings (including nurseries and childminders) remain open
§ Childminders and wrap-around childcare providers caring for school-aged children (including reception children) can only continue to open only for vulnerable children and children of critical workers.
3.32 These
services play a vital role in the local economy, for example, by
enabling key workers to work, however, wrap-around providers in
particular, have been severely impacted by the coronavirus
restrictions. It is therefore recommended that awards for ARG are
made based on these circumstances for the period 5 January to 15
February 2021.
3.33 For
this six-week period it is proposed that there are two levels of
payment; £3,000 for providers with specific business premises
and high fixed costs; and, £750 for licenced providers
without specific business premises but with other fixed costs. The
total cost of awards for this period is estimated to be
£60,000 to £75,000 (representing 45 to 65 awards of
grants to these businesses).
3.34
Additional payments to these businesses are proposed for the
six-week period from 16 February to 29 March if further lockdown or
tier restriction are imposed. The suggested payments for this
period would be a further £3000 and £750 respectively.
The total costs of awards for this period is estimated to be
£60,000 to £75,000 (representing 45 to 65 awards to
business)
Summary of estimated expenditure
3.35 The
table below provides a summary of the actual and proposed grant
payments. The modelling has been done based on higher and
lower assumed levels of uptake of each grant:
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Financial summary Funding available £8.402m |
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Lower value range |
Higher value range |
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November 2020 lockdown |
£1.100m |
£1.470m |
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Tier 2 top-up |
£1.400m |
£2.000m |
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Current Lockdown |
£2.200m |
£2.930m |
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Taxi Scheme |
£0.325m |
£0.520m |
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Early Years Current Lockdown |
£0.060m |
£0.075m |
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Early Years future lockdown |
£0.060m |
£0.075m |
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Future Lockdowns |
£1.650m |
Adjusted to funding £1.332m* |
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Total Spend |
£6.795m |
£8.402m |
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*The balance limit will depend on the available funds. Additional payments may be lower to prevent overspend against the available funds |
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Further
support - Notice of Motion regarding those excluded from Covid-19
Support Schemes
3.36
This council recognises that some people will have missed out on
Government financial support schemes set up in the pandemic due to
technicalities such as: - recently changing job; being a director
of a limited company; or earning less than half their income
through self-employment. In many cases, the businesses they
operate will not be able to claim grants because they do not have
premises and do not have fixed costs.
3.37
At the Full Council meeting on 28th January 2021, the
council agreed a Notice of Motion in support of campaigns such as
Excluded UK which have asked that the Government close the gaps in
its financial support schemes, and explore options to retroactively
compensate people and businesses that were ineligible for the
Government’s financial support. The Notice of Motion is also
seeking the support of councillors in promoting support available
from organisations focused on financial inclusion and support in
the city.
3.38 The notice of motion also asked that Policy and Resources Committee consider what additional practical steps the Council can offer to offer support and advice wherever possible to those affected.
3.39 This advice and support will include continuing to promote the council’s community hub that can assist with such matters as help with bills and mental health. Support for business goes beyond just the grants featured in this report. Officer will continue to signpost and direct businesses to other forms of support, many of which businesses can apply for directly. These include:
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Administered by the Local Authorities |
Other forms of support not linked to the council |
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4 ANALYSIS & CONSIDERATION OF ANY ALTERNATIVE OPTIONS
4.1 The alternative option would be to develop a new application process for businesses to access the grant funds. This option would entail a longer lead in time and delay vital payments to business.
5 COMMUNITY ENGAGEMENT & CONSULTATION
5.1 Business representatives from the Brighton & Hove Economic Partnership and Community Works advised on the grant criteria and helped to promote the scheme.
5.2 To promote the grants, the
council’s Communications Team launched a campaign to raise
and maintain awareness. Information has been proactively targeted
to businesses to encourage them to check their eligibility and
apply for a grant. Business and community organisations such as
Brighton Chamber, the Brighton & Hove Economic Partnership and,
Community Works in the city shared information with their members
and; council teams, for example VisitBrighton, The Communities Team
and the Environmental Health team, have been distributing
information direct to their business and charity contacts.
5.3 A ‘How
to’ applicants guide has been produced and was published on
16 November; which has been viewed by circa. 20,000 people. The
guide has been translated into five of the main languages spoken by
residents in the city: Arabic, Polish, Mandarin, Bengali and Farsi
and publicised within local communities.
Information has been shared on news and social media channels and
the website is being updated regularly, with a new FAQs page
published in January. The dedicated businesses and employers web
page attracted 77,849 unique page views from February 2020 to 27
January 2021; and unique page views during second and third
lockdown periods totalled 31,736. The business grant guide and web
pages have consistently been in the top 20 most viewed pages on the
council’s website.
5.4 The Revenues and Benefits
service have regularly been sending e-mails to businesses that,
from the records we hold, we believe to be eligible for
assistance. As well as generic mails to all these businesses
there has been more tailored messaging to specific sectors such as
hospitality, bars and pubs and non-essential retail.
5.5 The Economic Development team has contributed to the communications by distributing information to businesses and business support organisations such as Wired Sussex and Platf9rm. The team has responded to over 1,600 enquiries to the Economic Development inbox since November 2020.
6. CONCLUSION
6.1 Members are asked to agree the proposed approach to dispense the discretionary grant funds, including the top-up payments, to provide for further lockdown restrictions which will help to streamline the process of payments while ensuring probity and compliance with government guidance.
6.2 Members are asked to agree the proposed support measures for licensed taxi drivers and Early Years providers outlined in paragraphs 3.19 to 3.23 above.
7. FINANCIAL & OTHER IMPLICATIONS:
Financial Implications:
7.1 The government has announced two tranches of discretionary funding for businesses through Additional Restrictions Grant totalling £8.402m. The recommendations in this report aim to distribute this funding in line with the government guidelines for the grant. The schemes proposed are demand led but will be kept within the total allocation of funding through constant monitoring of the grants paid.
7.2 The council is fully compensated for all eligible grants paid through the Local Restrictions Support Grants schemes.
Finance Officer Consulted: James Hengeveld Date: 01/02/2021
Legal Implications:
7.3 Since the UK exited from the European Union on the 31 December 2020, the European State Aid regime ceased to apply to the UK. However, the UK must comply with international obligations in relation to subsidy control which are set out in free trade agreements and the World Trade Organisation Agreement on Subsidies and Countervailing Measures. The UK – EU Trade & Cooperation Agreement (TCA) also contains obligations in relation to subsidy control. The TCA is incorporated into domestic legislation and the Council must therefore comply with it. If measures taken by the Council comply with the TCA, they are very likely to comply with the UK’s other international obligations relating to subsidies.
7.4 The TCA does not apply to subsidies where the total amount granted to a single economic actor is below £325,000 over any period of three fiscal years. The grants outlined in this report will not exceed this threshold and there are therefore no subsidy control concerns.
Lawyer Consulted: Alice Rowland Date: 01/02/21
Equalities Implications:
7.5 The measures set out in this report will safeguard employment, local business and the economy. The applicants guide has been translated into the main languages spoken in Brighton & Hove and the community and third sector have assisted in raising awareness of the scheme within minority communities.
7.6 Licensed private hire and Hackney Carriage drivers have been identified as a high-risk group with death rates up to three times higher than the national average, according to the Office of National Statistics. The working environment makes social distancing impossible and the industry has a higher than average percentage of workers from ethnic minorities which is a particular concern as black, Asian and minority ethnic (BAME) groups are also shown to have a higher than average morbidity rate from the virus, (ONS). The licensed taxi driving industry is therefore being recognised within the grant scheme as a separate category. The proposal is still based on a fixed grant award paid against business costs.
Sustainability Implications:
7.7 This report seeks to provide vital financial support needed by businesses at this difficult time. Access to the grant funding will contribute to business resilience and sustainability.
Brexit Implications:
7.8 None
Crime & Disorder Implications:
7.5 All applications to the fund are made through the council’s MyAccount secure system which includes the necessary safeguards and evidence for audit and reduces fraud.
Risk and Opportunity Management Implications:
7.6 The use of the portal to access the funds reduces risk to the council. The MyAccount portal enables the necessary safeguards and evidence for audit.
Public Health Implications:
7.7 None
Corporate / Citywide Implications:
7.8 These proposals are in line with the council’s Corporate Plan to support the local economy and the Economic Strategy which aims to support economic growth.
SUPPORTING DOCUMENTATION
Appendices:
1. Table setting out the different grants schemes which have been in place.