‘Smash and grab’ to claw back £17m from councils
Labour condemns Government move to reclaim unused grants
WEST Midlands councils are being ordered to hand back millions of pounds in Treasury grants designed to help struggling businesses.
Birmingham alone faces returning £17 million to central government – even though some local businesses are still in a desperate financial situation due to coronavirus and restrictions designed to stop the virus spreading. It comes because the Treasury set councils a deadline of September 30 to distribute grants designed to keep employers afloat during the lockdown.
Millions was paid out, including £214 million in Birmingham. But the remaining money must now go back to the Treasury.
Labour has condemned what it calls a “smash and grab raid” on struggling businesses.
Lucy Powell MP, Labour’s Shadow Minister for Business and Consumers, said: “Businesses are in a fight for survival. The Business Secretary must stand up to the Treasury and demand they reverse this smash and grab raid on business support or risk the decimation of our high streets. It makes zero sense to remove economic support while public health restrictions are tightening.
“It’s now clear that some places and some businesses are going to be acutely hard hit over a longer period than was first thought.
“Rather than clawing remaining funds back, the Government should redeploy these funds and allow local areas to use them flexibly to support those businesses and town centres hardest hit, before we see waves of redundancies, shuttered high streets and viable businesses going bust.”
Many hospitality businesses are struggling as a result of the 10pm curfew and, although there have been scenes of crowded bars and drinkers in city centres, some restaurants have found customers are still reluctant to venture out.
Government data shows how much support for local businesses was allocated to each local authority, and how much they distributed.
It suggests Solihull will have to repay £2.3 million, Sandwell will have to pay £16.2 million and Wolverhampton will have to repay £8.6 million. Along with Birmingham, these councils are all currently subject to local lockdown restrictions.
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.”