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 £30 million 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.
Private sector could give out stuttering business grants
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.”
Scottish Conservative leader Douglas Ross
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 £123 million since the start of the pandemic.
A report drawn up ahead of councillors considering the discretionary fund tomorrow says the money is to “support businesses who have fallen through the cracks of government grant schemes”.
The authority has been forced to reject almost 3,000 applications from businesses – more than 40 per cent of all applications.
Thousands of businesses ‘excluded’ from SNP pandemic support
The council was told on December 9 that £4.4 million 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.
Hotel fears after SNP funding ‘heavily oversubscribed’
“Since that time the Scottish Government has launched a number of national schemes to support different types of businesses, including hospitality top-up, a taxi driver scheme, and NDR (non-domestic rates) schemes.
“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 has provided financial support to more than 11,300 businesses, with funding totalling more than £123 million since March 2020. The authority has received £2.8 million for the discretionary fund.
The authority 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.
Hospitality debt could be at £1.2bn as grant help ‘not enough’
Guidance provided to councils from the Scottish Government states that the “aim of this fund is to mitigate the short-term financial challenges being experienced by businesses adversely impacted by restrictions and regulations introduced since October to control the spread of Covid-19″.
According to Edinburgh City Council, the guidance adds that the “focus should be on those specific sectors and businesses who have not been, it will not be, supported by other” financial support.
In a report, the authority said that “precedence should be given to businesses who have experienced disruption without having been specifically required to close or adapt their operations as a result of legislation”.
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”.
Coronavirus: Top-up grants to help businesses ‘weather the storm’
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 spokesperson said: “Last year we established a £30 million 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 £12 million to local authorities to support the administration of funding, to help them meet increased demand for support and speed up the payment process.”