Yorkshire councils 'left to sink or swim', says Labour's Ed Miliband, as £140m of business grants are handed back

A Yorkshire MP says the region's local councils are being left to "sink or swim in the economic storm" after being forced to hand back nearly £140m in funding allocated to support local businesses during the pandemic.

At the start of the first national lockdown, Ministers made funding available for local authorities to support small businesses and those in the hospitality, leisure and retail industries, to help them stay afloat as they closed to help tackle the virus.

This fund operated on a ‘use it or lose it’ basis, with the provision that it would need to be applied for by 30 August or handed back.

Hide Ad
Hide Ad

But despite many areas now facing local restrictions, and warnings that half a million jobs could be lost in the hospitality industry alone before Christmas, Ministers are still forcing councils to return any cash they haven't yet used.

Read More
Millions meant for struggling Yorkshire businesses 'could be sent back unspent'

In Calderdale, Bradford, Kirklees, and Leeds, all of which have seen lockdown measures imposed, unspent support grants totalling £45,218,000 are being clawed back by the Treasury.

Across Yorkshire and the Humber nearly £140m has been unspent and handed back.

Labour argues that businesses across the country are currently in a fight for survival and should still be able to access these funds:

Ed Miliband is re-elected as Labour MP for Doncaster North. Picture: Marie CaleyEd Miliband is re-elected as Labour MP for Doncaster North. Picture: Marie Caley
Ed Miliband is re-elected as Labour MP for Doncaster North. Picture: Marie Caley
Hide Ad
Hide Ad

It is calling for government to redeploy the remaining business grants funding as a Hospitality and High Streets Fightback Fund, to save jobs and businesses now, and help them survive through the winter.

Shadow Business Secretary and MP for Doncaster North Ed Miliband said: "This emergency funding was meant to provide a life raft for businesses hit hard by this crisis.

"Now despite restrictions being reimposed, local councils across Yorkshire are being forced to hand back the cash to Government. They're being left to sink or swim in the economic storm

"This is a devastating choice with zero logic behind it, as public health restrictions must go hand in hand with economic measures.

Hide Ad
Hide Ad

"The Business Secretary must stand up to the Chancellor and ensure this funding is redeployed so businesses across Yorkshire can access the support they need to survive."

A spokesman for Kirklees Council, which has the highest underspend in the region at £18m, said it "has been working with businesses for months to make sure every eligible business gets the support they need".

He added: "The COVID-19 business grant funding was allocated to Kirklees Council on the basis that we help approximately 9500 eligible local businesses, and we have achieved this target.

"The underspend has occurred because the Government overestimated the number of Kirklees businesses that would be eligible for a £25K rather than a £10K grant, in line with the rules they set for this scheme.

Hide Ad
Hide Ad

"The underspend comes as a result of the initial estimate by government and not through any lack of action by the council.”

A Government spokesman said: “Our support for business has reached, and continues to reach, millions of firms across the country. More than £11 billion has been paid out in grants to almost 900,000 businesses, with a further £617 million available to councils to use at their discretion.

"We have also backed businesses with a wider package of support worth almost £200 billion, including cuts to VAT and business rates relief.

“We keep all financial support under review to support businesses who need it most. That’s why we introduced new targeted support for businesses in England that are required to temporarily close due to local interventions to control the virus, who will now be able to claim up to £1,500 per property every three weeks.”

Comment Guidelines

National World encourages reader discussion on our stories. User feedback, insights and back-and-forth exchanges add a rich layer of context to reporting. Please review our Community Guidelines before commenting.