£10m for businesses – if Westminster agrees
MPS AND MAYOR SAY UNUSED CASH FROM EARLIER GRANT FUND COULD HELP STRUGGLING COMPANIES NOW
A £10 MILLION lifeline could be thrown to businesses on the brink in locked-down Leicester – if the government backs a city council plan.
Hundreds of non-essential shops, pubs and restaurants, hairdressers and other firms in the city cannot reopen until at least July 18 because of the tighter restrictions imposed to stop the spread of coronavirus.
MPs, mayor Sir Peter Soulsby and business leaders have been imploring the government to offer extra financial support to those companies as long as lockdown continues, but so far no extra cash has been promised.
Ministers have also said there will be no extra help down the road.
Now, however, the city council has suggested £10 million, as yet unspent from a previous £85 million government grant support package for businesses during the earlier phase of lockdown, could be repurposed to continue propping up firms.
The city council said it cannot unilaterally make the decision to do this as the government has demanded any of the unallocated £85 million is returned.
About £70 million has been paid to more than 6,000 companies, but some of the allocation remains.
Sir Peter said: “This is very bad news. The Health Secretary, Matt Hancock, did promise us that the government would support businesses in Leicester, but now they are saying they won’t.
“I sympathise entirely with businesses in Leicester which have to try to deal with this worry and uncertainty on a daily basis. We will be asking the government to deliver on its earlier promises and provide our businesses with the support they so desperately need.
“In the meantime, though, we are determined to come up with our own solutions, and we will be putting these to government.
“This money has already been paid to us by the Department for Business, Energy and Industrial Strategy (BEIS) and sits in our bank account. The government does not have to pay us any further money to support businesses, we simply need permission to spend the funds we have.
“We have come up with a plan where we could provide more help to Leicester businesses by extending both the national and our discretionary grants schemes, as well as supporting those excluded from the national scheme – particularly factories, manufacturing and independent retail, hospitality and leisure.
“Extending these schemes rather than starting a new one means we could pay money out quickly – if the government will let us.”
The Mercury has asked BEIS if it will approve the city’s proposal but has so far had no response.
Labour Leicester South MP Jon Ashworth said: “The government promised extra assistance for Leicester following the announcement of a local lockdown on June 29 and now it is trying to backtrack on that promise. Extra support is needed by all businesses, but especially the food and drink sector, evening and nighttime businesses and hair salons.
“These businesses, that were due to open on July 4 and now cannot open until at least 18 July, are on the brink of insolvency.”
Even if the government did back the plan, it would still leave businesses outside the city boundaries but within the lockdown zone, such as in Oadby, Wigston and Birstall, unsupported.