Old Mill Updates

COVID-19: Discretionary Grants Fund applications now open

Local authorities across the South West have started to open-up the applications process for SMEs to apply for payments from the Discretionary Grants Fund.

27th May 2020

What is the Local Authority Discretionary Grants Fund?

In a nutshell, the Local Authority Discretionary Grants Fund is aimed at small businesses who have been adversely affected by the COVID-19 crisis but who didn’t qualify for the previous schemes. However, those who have applied for the Coronavirus Job Retention Scheme and the Self-Employed Income Support Scheme are eligible to apply.

This additional fund has largely been aimed at small businesses with ongoing fixed property-related costs. Local authorities have been asked to prioritise businesses in shared spaces, regular market traders and small charity properties that would typically meet the criteria for Small Business Rates Relief, as well as bed and breakfasts that pay council tax rather than business rates. However, local authorities have the option to choose to make payments to other businesses based on ‘local economic need’.

In terms of criteria, businesses must be small, with under 50 employees and they must also be able to demonstrate that they have seen a significant drop of income due to coronavirus restriction measures.

Grant levels awarded will be at the discretion of the local authorities. Central Government have said that the maximum a grant can be is £25,000, but it’s down to each local authority to set their own grant level. Typically though, grants awarded are expected to be £10,000 or below.

It’s important to note that local authorities only have limited funding available for this grant. Once the closing date for applications has passed, each local authority will decide who to allocate funds, with grants currently anticipated to be paid out from mid-June onwards by certain local authorities.

How do I apply for a discretionary grant?

At first glance there doesn’t appear to be a uniform process having scanned local authority sites across the region.

In Somerset, some portals opened on Tuesday 26 May and it’s worth checking whether there is a closing date for applications.

For instance, Sedgemoor District Council’s website states the scheme is open for two weeks from 26 May until 12 noon on 9 June 2020 and applications should be submitted via email only. Mendip District Council’s applications also close on the 9 June 2020, but at 5pm in their case. Applications can be made via a link on their website.

Anecdotal evidence suggests that portals have been inundated with applications with South Somerset District Council temporarily pausing applications yesterday (26 May 2020) due to the high demand.

In a previous guidance note, COVID-19: Emergency business loan scheme revamped and registering for grants we recommended that you should register online with your local authority rather than waiting to be contacted by them.

NB This article also contains links for local authorities across Cornwall, Devon, Dorset, Somerset and Wiltshire.

Chris Bowles, a Director in Old Mill’s Wells office commented:

‘What’s interesting is that it appears that some level of discretion has been given to local councils to allocate funds to ‘businesses based on local economic need’. How local authorities across the country will interpret this and apply consistently is unclear so we would urge affected businesses to put in an application before the deadline. If queried, you can always argue that the guidance was unclear, hence your application.’

What information is required to submit an application?

To complete the Local Authority Discretionary Grant application form you will need the following documents or information available:

  • Evidence you have been trading before the 11 March 2020
  • Evidence of your income for 12 months to Feb 2020 and your income from March 2020 to end April 2020. This could be a Business Bank statement, annual tax statement, Companies House printout.
  • Evidence of trading either as a sole trader, limited company or other e.g. VAT registration
  • Evidence of your fixed building costs (rent/mortgage)
  • Evidence of your food licence if applicable
  • Business NNDR account number (Business Rates bill) if applicable
  • Business number from Companies House or Charity number from Charity commission
  • Business Bank account details

For more information, or if you have any questions about any of the above, please contact your Old Mill adviser or email enquiries@om.uk.