Thousands of firms in limbo over lifeline funds
THOUSANDS of businesses yet to receive any support to mitigate the pandemic are being forced to wait months for councils to roll out a
£30 million discretionary fund – with the majority of local authorities yet to launch the lifeline support.
Businesses also face a postcode lottery with different levels of funding being offered by different councils.
In November, Nicola Sturgeon officially announced a £30m discretionary fund to allow councils to “provide additional support for businesses where they consider that necessary or justified”.
Specific examples were given such as businesses in supply chains or taxi drivers being hit indirectly by hospitality businesses being closed.
But as of last week, the scheme has only been rolled out in five Scottish councils – with authorities in Aberdeenshire, Inverclyde, Stirling, West Dunbartonshire and West Lothian the only areas where the fund was live, according to the Federation of Small Businesses (FSB).
Authorities in Edinburgh and Glasgow are set to sign off the discretionary funds later this week – but officials in the capital have warned there is not enough funding to help all traders and applications could take another month to process due to the volume of expected interest.
Scottish Conservative leader Douglas Ross said the fiasco is an example of the SNP not matching their commitments with funding reaching businesses.
He said: “The SNP announced this funding to much fanfare but clearly haven’t given local authorities across Scotland the support to get the money to businesses who urgently need it.
“Businesses the length and breadth of the country will have been waiting months to receive this support since the fund was first announced. That is completely unacceptable and threatens countless jobs and livelihoods.”
Mr Ross added: “The SNP are good at announcing funding schemes but utterly woeful in getting it into businesses bank accounts. Businesses will be wondering what on earth has been going on with the extensive delay to get this funding live.
“The SNP have only got a tenth of the funding they’ve announced actually out the door to businesses. That is painfully slow progress and this situation in Scotland’s largest city is the latest in a long line of their failure to fully support them.”
Stuart Mackinnon, the FSB’S external affairs manager for Scotland, said: “While there are understandable reasons for the delay in these funds getting rolled out, that’s of little comfort for businesses running out of road.
“We need to see all of the local authority discretionary funds launched as soon as possible and we want to see businesses who have little or no support getting help.
“If these funds are exhausted quickly, as we expect we might see, ministers in Edinburgh will need to top-up the money available.”
Glasgow City Council has approved more than 16,000 funding applications worth more than £123m since the start of the pandemic.
The council was told on December 9 that £4.4m was being made available from the Scottish Government for the funding, but officials have warned “the scale of the impact seen by the pandemic means that this is far less than what Glasgow is paying to businesses under the strategic fund every four weeks”.
Officers in Glasgow have said “it was prudent to wait until all government schemes were known” so that it was clear “where targeted support was being directed”, instead of launching “a scheme before the Christmas break and risk potentially funding sectors and areas of the economy already receiving support”.
Glasgow City Council is proposing paying £9,000 for businesses employing between 25 and 50 staff,£6,000 for businesses employing between 10 and 24 staff and £3,000 for businesses employing nine staff or less and is expected to go live from February 5 and close on February 19.
A Glasgow City Council spokesman said: “While the discretionary fund was indeed announced in November as a scheme to help taxi drivers and others, we did not receive confirmation of our allocation until last month.
“We could not launch any discretionary scheme to support businesses who have fallen through any gaps in government support until we knew what those gaps were.
“To have carried out any other course of action would have been to waste public money.”
Edinburgh City Council is set to approve its discretionary fund being rolled out from Monday, with officials recommending one-off payments of £2,000 being offered.
It is thought that officials wanted feedback including from the FSB to ensure the criteria was appropriate, causing a hold-up to the rollout.
But council officials have warned that “there are not sufficient funds available to support all businesses in need” and have recommended that
“the grant be paid on a first come first serve basis”.
Officers in the capital have also warned that while approved applications will be paid out within three working days of being processed, “due to the expected number of applications, processing time may be up to four weeks”.
The over-stretched authority is having to dedicate 10 members of staff to administer the applications.
A Scottish Government spokesman said: “Last year we established a
£30m local authority discretionary fund to provide capacity for local authorities to direct funding to specific groups or sectors within their areas.
“The use of this funding is entirely at the discretion of local authorities based on the specific needs of their local economies.
“We worked closely with Cosla to develop guidance on how funding should be distributed while giving them the flexibility to use their local knowledge to the support businesses.
“More than 90% of all business support funding announced is now live, with some smaller schemes due to come on stream in the coming weeks.
“We have provided an additional £12m to local authorities to support the administration of funding, to help them meet increased demand for support and speed up the payment process.”