Coronavirus: Businesses collapsing every day due to delays processing grants, minister suggests

Ministers consider intervening

Businesses are going “to the wall” every day because councils are too slow to process coronavirus-related grants, a cabinet minister has suggested.

Robert Jenrick, the Local Government Secretary, also warned ministers were prepared to act unless many struggling firms received help soon.

The government has given local authorities billions of pounds to distribute to companies hit by the global pandemic.

Some, such as Cornwall, have already passed on more than 90 per cent of the cash they were given to businesses, Mr Jenrick told MPs.

But he added: “I would urge councils who have not yet managed to reach those sorts of levels to now focus on this and ensure those grants get out, because every day that those grants are delayed there will be businesses that go to the wall as a result of that.”

Giving evidence to the Commons Housing, Communities and Local Government committee, he warned: “I think we will have to take action against those councils that are less successful”.

The government’s £12bn Small Business Grant Fund scheme is one of those administered by local government.

At the weekend ministers announced thousands of small businesses previously unable to access the scheme could now benefit.

The move followed warnings that small companies who did not claim relief on business rates – because they rented shared office space or paid rates through their landlord – were unable to access the support.

Ministers said they would ask local authorities in England to prioritise businesses in shared spaces, including markets as well as bed and breakfast owners.

Mr Jenrick had been pressed by MPs on the committee to set out what action the government was taking to ensure money announced by ministers is reaching businesses who need it.

Mr Jenrick said that overall councils were successfully getting the funds to struggling firms.

But he admitted there had been “wide” variation between the best and worst performers.

One council has paid out just a quarter of its grants, he told MPs.

Mr Jenrick urged the public to look at the data, which has been published by ministers, to see how well their local authority is performing and “put pressure” on those councils which need to improve.

He added that some councils had overcome significant challenges, including a rural location and large number of small businesses, to be at the top of the league table.

Local councils have been accused of imposing unnecessary bureaucratic hurdles which are making it harder for businesses to access financial support.