Alarm over councils’ delay to get £1.6bn in grants to firms

RISHI SUNAK, the Chancellor, will be questioned by an influential group of MPS over the “extremely concerning” failure of local councils to hand out more than £1.6bn of emergency help for cash-starved businesses.

The Treasury Committee, the most powerful group of backbench MPS, demanded ministers step in “urgently” to ensure money was sent to firms after figures revealed only a fraction of some grants had been delivered.

Its chairman Mel Stride, a Conservative MP and former Treasury minister, said the Chancellor would face questions over the glacial distribution of grants by councils when he is hauled in front of the committee after the Budget.

The Telegraph revealed on Thursday that ministers were seeking answers from local authorities sitting on grants despite the emergency schemes being unveiled months ago.

“It’s extremely concerning,” said Mr

Stride. “The Government should get to the bottom of what’s causing the delays and seek to fix it urgently.”

Local authorities have been tasked with distributing some £2.4bn of grants to tackle the economic fallout of the second wave. Councils chose which businesses impacted by renewed Covid19 restrictions needed the help.

But official figures revealed this week that £1.6bn had yet to be sent out as of mid-january, including almost 90pc of the £1.1bn set aside for the additional restrictions support grant. A Government source said the failure of councils to send out grants was concerning ministers, who were seeking explanations.

The Local Government Association said councils “are working fast to ensure businesses eligible for this funding are able to receive it as quickly as possible”.

A Government spokesman said some local authorities were “taking far too long” to send money out to businesses and said the worst offenders would be “closely monitored for progress”.