The Press and Journal (Inverness, Highlands, and Islands)
City businesses on edge get least government aid
● Legacy of high rateable values means many applications rejected
Businesses in Aberdeen are least successful at receiving lifeline funding to keep them afloat of any in Scotland.
New government figures show the city council failing to keep up with improvement elsewhere in the country.
More than three in 10 firms in the city have had their grant applications left in limbo or rejected during the coronavirus crisis.
Council bosses have blamed the situation on eligibility rules for the emergency money, which have resulted in swaths of city firms being turned away as their properties have historically been worth too much money.
The relief grants are linked to the business rates system, which uses property values as a yard stick, and is loathed by businesses.
As of Thursday, only 69% of the 2,372 applications handled by Aberdeen Council workers had resulted in pay-outs; an intervention worth nearly £20.4 million.
A fortnight ago Aberdeen sat second bottom in the table of all 32 Scottish local authorities – only behind South Lanarkshire.
But improvements in the north-east have not nearly matched those in the central belt, as grant awards in South Lanarkshire have now soared from 57% to 84%.
Aid appears easier to obtain in other parts of the north with Highland Council processing 88% of applications, resulting in awards of £57.9m, and Aberdeenshire paying out £36.3m to 87% of businesses in need.
Aberdeen Central MSP Kevin Stewart, the SNP’s local government minister who previously accused the city council of letting businesses down on pay-outs, said: “We are all working together throughout this crisis and it is important that we learn from each other and share best practice as we respond to the pandemic.
“With Aberdeen City Council now toiling behind other local authorities in terms of distributing grants, the council leadership must look to others on how better to get cash out to businesses as quickly as possible.
“This is not about the efforts of staff, it is about those in charge taking responsibility and responding as best as possible to the challenges faced – after all we only need to look to Aberdeenshire.”
Grants available include single payments of £10,000 for small businesses or £25,000 for qualifying retail, hospitality and leisure companies, and of £7,500 or £18,750 for any other qualifying properties.
The scheme uses rateable values to gauge eligibility, with the upper limit for help set at £51,000. But this does not apply to firms with single properties valued above that cut-off. Town House officials claimed that 18% of Aberdeen’s unanswered calls for cash have been left wanting because they don’t fit the Scottish Government criteria.
Reasons for rejection include properties being valued above the £51,000 ceiling or not being on the small business bonus scheme, firms paying their rates along with rent as one sum to landlords, and some companies not being registered for business rates by mid-March.
Premises such as garages – classed as the service industry instead of retail – and warehouses without office or retail space have also missed out.
City officials claim there are only around 300 applications still being processed and emphasised that 93% of viable claims have been processed.
Last night council coleader Douglas Lumsden said: “There are so many businesses ineligible for support in Aberdeen, so many unable to claim.
“These firms are therefore being hammered twice: firstly as their rates are so high and then because it means they miss out on vital funding.”
The Conservative councillor added: “I’m calling on Kevin Stewart, as local government minister, to push Finance Secretary Kate Forbes to put something in place to help Aberdeen businesses.”
Last week, the Scottish Government tweaked the system so companies in the hardest-hit industries with multiple properties with combined rateable values more than £51,000 will now be able to apply for help.
A government spokesman said that the above-average rateable value of firms in Aberdeen meant that a “larger proportion” of local businesses benefit from the 100% relief offered to firms with values of more than £51,000.