New £617m Government grant fund will exclude thousands of 'priority' firms

The Government announced details on Saturday of a new £617m “top-up” fund it said would help bed and breakfast owners and market traders who were previously not eligible to receive money from a £12bn fund set up to give grants to businesses affected by the coronavirus lockdown.

Among those who had missed out on previous grants offering £10,000 to struggling firms were around 10,000 bed and breakfasts - including hundreds in Yorkshire - who pay council tax rather than business rates.

Although such B&Bs were specifically cited in the Government press release as one of the sectors that should be prioritised by councils to get the new funding, the Department of Business, Energy & Industrial Strategy has now confirmed to The Yorkshire Post any business eligible for the Self-Employed Income Support Scheme cannot receive the grants.

The self-employed scheme allows those eligible to claim 80 per cent of their average monthly trading profit up to £2,500 per month from June for three months - covering 95 per cent of people who receive most of their income from self-employment.

Fiona Gardham, who runs the Eighteen97 bed and breakfast in Goathland with husband Tim, is among those who will miss out. She has previously said her business could not ensure its survival with just the money from the self-employment income scheme.

“It feels like the Government are trying to do a bit of positive PR when they are not actually giving anything,” she said.

“It is worthless not only to bed and breakfasts and market traders but to anyone in business who makes a profit. People are going to be absolutely devastated.”

She said the unfairness is added to because those businesses who could already claim from the previous grant schemes can also receive the self-employed income support scheme money.

Mrs Gardham said she believes the “vast majority” of bed and breakfasts who would have been hoping for support will be in the same position as herself.

“I would estimate that through the self-employment income scheme Tim and myself will get under £3,000, so it is less than £1,000 a month. We are probably one of those on a higher turnover for a three-bedroom bed and breakfast.”

Mrs Gardham spotted the detail about the ineligibility of those who qualify for the self-employed income support scheme in a picture of a joint ministerial letter about the top-up fund that had been posted on Twitter by Thirsk and Malton MP Kevin Hollinrake on Saturday.

In contrast with the Government’s official press release which made no mention of the ineligibility rules but said further guidance for local councils administering it would be set out shortly, the ministerial letter revealed “businesses which are eligible for the existing grant schemes or Self-Employed Income Support Scheme are ineligible”.

A spokesman for the Department for BEIS confirmed to The Yorkshire Post that the details shown in Mr Hollinrake’s tweet were accurate.

Mr Hollinrake said today that while he sympathised with those who felt they might have been due to receive some money from the grant scheme, he believes the scheme’s rules are correct.

“The discretionary fund is there to help people falling through the cracks. The Government has put in place a huge package of support,” said the Conservative MP.

“It will be up to the local authorities but there will be some basic rules. It is clearly there to help people who are not being supported in other ways.”

He said with hundreds of local councils in England, there will only be a few million pounds to share out in each area.

“It is very important that the local authorities try and use the money to the best effect.

“If there is a timing issue with the press release and the scheme rules I apologise to those people if they are disappointed. You are never going to get a scheme that supports everybody equally.

"What the Government has done has benefited the vast majority of people who run businesses in this country. There are so few people who will not benefit from any support. They have tried their best to make it fair and this should mean everybody gets something.”

The new £617m fund is due to allow local councils to decide which eligible businesses receive money, with three levels of grant payments - £25,000, £10,000 and up to £10,000.

A joint statement from the Department of Business, Energy & Industrial Strategy and the Ministry of Housing, Communities & Local Government had specified that bed and breakfasts are among those expected to benefit.

“This additional fund is aimed at small businesses with ongoing fixed property-related costs,” it said.

“We are asking local authorities to prioritise businesses in shared spaces, regular market traders, small charity properties that would meet the criteria for Small Business Rates Relief, and bed and breakfasts that pay council tax rather than business rates.

“But local authorities may choose to make payments to other businesses based on local economic need. The allocation of funding will be at the discretion of local authorities.

“Businesses must be small, 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.”

The press release said further guidance for local authorities about the scheme will be set out soon, with the exact amount given to each council to be confirmed later this week.

So far, more than £7.5 billion has been paid out to over 614,000 businesses through the existing Small Business Grants Fund and Retail, Hospitality and Leisure Grants Fund.

David Weston, chairman of the Bed & Breakfast Association, said his organisation would be urgently seeking more information from the Government on whether its members would be unable to apply to the new top-up fund.

“After six weeks of campaigning, we welcomed Saturday’s announcement of the new £617 million fund and the Government’s clear statement that B&Bs paying council tax would be prioritised as recipients of the fund," he said.

"There was no ’small print’ published with the announcement, but our understanding was that it would put Council Tax paying B&Bs on a level playing field with Business Rates paying B&Bs, as far as Government support was concerned. That is what we have been campaigning for.

“We will be studying any ‘small print’ - and if there are conditions which mean that Council Tax paying B&Bs are not treated comparably with those on Business Rates, we will be pressing the Government to rectify that. The first thing we need, of course, is clarification of the full ’T&Cs’ of the top-up fund. The devil is often in the detail - which isn’t yet clear.

“The Bed & Breakfast Association is here to fight the corner for our members - 51 per cent of whom pay council tax not business rates - and if the playing-field is still not level, we will continue to press the Government for fair and equal treatment for all small B&B businesses.

“The B&B sector is a vital part of Britain’s tourism heritage and worth some £3.6 billion to the UK economy, and sustains over 60,000 livelihoods.”

Gill Craddock, who runs the Mill Croft B&B in Goathland with her husband David, had started a petition calling for access to the Government grant scheme which has been signed by almost 8,000 people across the country.

She said she was hugely disappointed to hear businesses such as hers appear set to miss out on grants once again.

“It feels like we are back at Square One. They throw you a lifeline and then it is snatched away again. We are still not being treated equally.

“Over the past few weeks Fiona and I have felt like helpless agony aunts with the calls we have had from people. So many people are absolutely desperate for help. Once again there is no equality in this - why are we so different from any other business?

“It is like Groundhog Day.”

Mrs Gardham said the financial impact of the lockdown is particularly bad for many bed and breakfast owners, who have their homes as well as their businesses on the line.

“Gill and myself have had phone calls from people under who were under horrendous stress and feeling absolutely desperate. They have had their hopes raised with this and they will be feeling much worse now."

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