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Car dealerships among firms missing out on new £3,000 government grant scheme as councils sitting on £1.6bn

3 months ago

Councils are sitting on a cash pile of £1.6bn in grants due to businesses that they have failed to hand out, a Freedom of Information request has found.

The grants – due to businesses including car dealerships that cannot carry on with their normal operation – are worth £3,000 per company per month.

Car dealers are due the cash even if they are continuing to operate via click and collect as they have been forced to close and cannot provide their usual ‘in-person customer service’.

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Dealers operating from a property with a rateable value of £51k or above are entitled to the maximum grant of £3k every 28 days.

However, thousands of businesses are struggling to access the funds with councils failing to hand out £1.6bn, according to new data.

A Freedom of Information request was submitted to the 314 councils across England who are responsible for distributing the Additional Restrictions Grants (ARG) by The Events Industry Alliance.

Of the 40 councils that responded, figures revealed just 13 per cent of the money had been handed out.

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Extrapolating out the numbers suggests councils are still sitting on around £1.6bn, the EIA found.

The FOI data revealed that the figure was even lower for some local authorities – including Bristol City Council handing out £965,000, or seven per cent, of the £13.4m allocated.

Manchester City Council paid out only £1m of £16.6m it has available and North Tyneside handed out £586,000 of a £6.1m pot for local firms.

Some local authorities, such as Ealing Council who received £9.8m, had not made any payments as of January 26.

Of those councils that responded, only South Lakeland District Council had handed out more than half the funds it received – with £2.1m of a £3m pot distributed.

Car Dealer has found a number of dealerships across the country have struggled to access funds.

Last week, it was reported that confusion in Scotland meant dealers had fallen through the cracks with the grants.

Outdoor car lots in South Lanarkshire and Dundee contacted Car Dealer about their local councils continuing to deny them grants.

A spokesperson from the Department for Business, Energy and Industrial Strategy said car dealers in England can access the latest schemes.

The spokesperson said: ‘Car dealership businesses can access our grant schemes – including the newest, a one-off grant worth up to £9,000 per business, which is in addition to the £3,000 a month businesses required to close receive.

‘£1.1bn of additional discretionary grant funding has also been made available for local authorities.’

Andrew Harrison, a director at the Event Supplier and Services Association, said: ‘It is deeply concerning that local authorities appear not to have paid out 87 per cent of the emergency funding first given to them by the government nearly four months ago.

‘Banks stepped up to the challenge with the bounce back loans schemes they administered, with many making payments to eligible businesses rapidly and we urge councils to show the same urgency.’

Harrison called on the government to do more to ensure ARG funds are received faster with Covid-19 restrictions remaining in place.

He said: ‘We are making an urgent call on the UK government and local MPs across England to provide clear guidance to local authorities on issuing the Additional Restrictions Grant, in order that payments are made to eligible companies as soon as possible.’

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A spokesperson for BEIS added: ‘All of the £1.6bn in Additional Restrictions Grants funding has been paid to Local Authorities.

‘We have already issued clear guidance to local authorities, which are responsible for administering grants, and are working tirelessly with them to ensure that funds are paid out as quickly as possible to those that need it.’

The department was unable to provide an exact figure for how much money has not been paid out by councils, adding that the amounts paid out to businesses through Covid-related support schemes will be released ‘in due course’.

James Baggott

James is the founder and editor-in-chief of Car Dealer Magazine, and CEO of parent company Baize Group. James has been a motoring journalist for more than 20 years writing about cars and the car industry.

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