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Local Grant Funding Guidelines Policy

Guidance for applications to Spelthorne Borough Council for Local Authority Discretionary Grants Fund for Covid-19

Introduction

1.In response to the Coronavirus (COVID19), the Government announced there would be support for small businesses, and businesses in the retail, hospitality and leisure sectors, delivered through the Small Business Grant Fund (£10,000) and the Retail, Leisure and Hospitality Grant Fund A and B (2 grants, one of £10,000 for rateable value up to 15,000 and the other of £25,000 for properties with an RV above 15,000 and below 51,000).
2.This new Local Authority Discretionary Grant Fund is aimed at small and micro businesses with ongoing fixed property-related costs who were not eligible for the Small Business Grant Fund or the Retail, Leisure and Hospitality Fund, and which have relatively high ongoing, fixed property related costs, and which can demonstrate that they have suffered a significant fall in income due to the COVID-19 crisis. 
3.This guidance sets out the criteria under which businesses will qualify to make an application to the Local Authority Discretionary Grants Fund, and the evidence required to support an application, and is aligned with the Government guidance issued on 13/05/2020. That can be found at: https://assets.publishing.service.gov.uk/government/uploads/system/upload s/attachment_data/file/885011/local-authority-discretionary-grants-fundguidance-local-government.pdf
4.The Government guidance gives local authorities discretion over the grant scheme, and the Council may use its discretion based on local economic need. The Councils decision regarding the award will be final.
How will grants be provided?
5.Local Authorities will be responsible for administering and delivering grants to eligible businesses.
6.Local Authorities that will be responsible for making payments to businesses and which will receive funding from Government are business rate billing authorities in England.
7.This grant scheme will offer a lifeline to businesses who are struggling to survive due to the corona virus shutdown. Local Authorities should make payments as quickly as possible to support struggling businesses.
How much funding will be provided to businesses?
8.This is the second appeal for the original Discretionary Grant Fund and the amount available has been reduced therefore the amounts on offer are reduced.
9.The Council has access to limited funds (a maximum of £150k) balance for this scheme and it is expected that majority of grant allocations made will be under £10,000.
10.

In order for the Discretionary Grant to benefit the maximum number of eligible small businesses please evidence the property costs of the business plus taking account the loss of income caused by the lockdown. The grant levels will be between:

  • £1,000 and £10,000
11.A de-Minimis level will apply to this scheme. Applicants will need to be paying at least £250 rent per calendar month for their business premises to qualify to apply for a grant.
12.If the fund is oversubscribed with the applications received, the Council reserves the right to amend the grant levels to a pro-rata basis, based on the applications received and approved, as a way of dealing with this situation, should it arise. Or prioritise support for businesses that are crucial to the local economy.
13.This round of funding will have an upper RV limit of RV or rent of £100k.
14.All Councils in Surrey have agreed and approved these guidelines in principal, although it is up to each individual Local Authority to use their discretion on what type and amount of grants they approve.
Scope and Eligibility
15.

Under the guidance issued to the Council by the Government, it has been determined that, the small businesses to be prioritised for access to the grant funding are:

  • Small and micro businesses, as defined in Section 33 Part of the Small
  • Business, Enterprise and Employment Act 2015 and the Companies Act 2006
  • Businesses with relatively high ongoing fixed property-related costs
  • Businesses which can demonstrate that they have suffered a significant fall in income due to the COVID-19 crisis
  • Businesses which occupy property, or part of a property, with a rateable value or annual rent or annual mortgage payments below £100,000
  • Small businesses in shared offices or other flexible workspaces
  • Charity properties in receipt of charitable business rates relief which would otherwise have been eligible for Small Business Rates Relief or Rural Rate Relief
16.

To be a small business, under the Companies Act 2006, a business must satisfy two or more of the following requirements in a year:

  • Turnover: Not more than £10.2 million
  • Balance sheet total: Not more than 5.1 million
  • Number of employees: a headcount of staff of less than 50
17.

To be a micro business, under the Companies Act 2006, a business must satisfy two or more of the following requirements:

  • Turnover: Not more than £632,000
  • Balance sheet total: Not more than £316,000
  • Number of employees: a headcount of staff of not more than 10
18.

To be eligible to apply for a grant under this scheme, a small business must:

  • Have been trading on 11th March 2020
  • Be small, with fewer than 50 employees
  • Have below £100,000 ongoing fixed property-related costs, and
  • They must also be able to demonstrate that they have had a significant drop of income due to Coronavirus restriction measures
19.

This grant funding is for businesses that are not eligible for other support schemes. Businesses which have received cash grants from any central government COVID-19 related scheme are ineligible for funding from the Discretionary Grants Fund. Such grant schemes include but are not limited to:

  • Businesses that applied for the Self-Employed Income Support Scheme
  • Small Business Grant Fund.  Retail, Hospitality and Leisure Grant
  • The Fisheries Response Fund.  Domestic Seafood Supply Scheme (DSSS)
  • The Zoos Support Fund.  The Dairy Hardship Fund
20.Businesses who have applied for the Coronavirus Job Retention Scheme are eligible to apply for this scheme.
21.Only businesses which were trading on 11 March 2020 are eligible for this scheme.
22.Companies that are in administration, are insolvent or where a striking-off notice has been made are not eligible for funding under this scheme.
23.In order to ensure all eligible businesses have the opportunity to apply for the scheme, the Council will assess the evidence and quantify the level of demand for funding from businesses that fall within the priority areas set out in the government guidance and local eligibility. This will be time and fund limited, whether the government give further funds is to be seen.
24.

In line with the guidelines funding will include any of following types of businesses falling within the following categories:

  • Small businesses in shared offices or other flexible workspaces such as Cafes, shops, restaurants and other food and beverage outlets in industrial parks, science parks and incubators which do not have their own business rates assessment
  • Regular market traders who do not have their own business rates assessment
  • Bed & Breakfasts which pay Council Tax instead of Business Rate
  • Charity properties in receipt of charitable business rates relief which would otherwise have been eligible for Small Business Rate Relief or Rural Rate Relief
  • Businesses in the Supply Chain to the Retail, Leisure and Hospitality that did not qualify for business grants
  • We are aware of over 70 Businesses may qualify for a business grant but is waiting for a decision from the independent Valuation Office Agency.  Start-up businesses who have seen a significant fall in seed investment due to the Covid-19 crisis
  • Private businesses providing a mixture of wellness and medical support that, have been effectively closed due to social distancing measures
  • Properties used for the provision of temporary living / boarding accommodation to animals (E.G. Catteries and kennels) that were closed or saw a significant reduction in income due to the Covid-19 restrictions on human travel
  • Businesses that provide cultural, arts and tourism services that did not qualify for the Retail, Hospitality and Leisure grants · Businesses who may qualify for a business grant but is waiting for a decision from the independent Valuation Office Agency.
25.The Council reserves the right to vary the terms of the scheme at any time, and without notice, should it be necessary to do so.
26.Any business qualifying for a Small Business Grant or the Retail, Leisure and Hospitality Grant is not eligible for this discretionary top up grant.
27.The Council will not approve or make payment of a further grant to a business that has already received a grant or partial grant passed on by a landlord under one of the schemes mentioned in 17 above.
Who will receive this funding?
28.There is an application process to enable businesses to lodge a request for funding.
29.The Spelthorne application form is at www.spelthorne.gov.uk this form including the declaration must be fully completed with all the required evidence to be considered for a grant.
30.This application process will allow Spelthorne to undertake pre-payment checks to confirm eligibility and to allow the Council to determine how to use its discretion in relation to the appropriate level of grant.
31.Spelthorne will use their discretion in identifying the right person to receive this funding, based on the application process.
32.Spelthorne will confirm businesses eligibility to the grant scheme including that any payments accepted must be in compliance with State aid requirements.
33.A guide to the grant levels are presented in the table below, however dependant on the number of applications funding amounts could change.

 

CategoryMaximum Grant AmountCriteria
At least £250 in rent or flexible licence fee per calendar month. / Eligible market trader, unable to trade with ongoing costs£1,000 to £10,000Eligible market trader unable to trade or local business with Surrey registered trading address, trading on or before 11 March 2020.
RV or property costs up to £15K per annum RV or where no RV rent/ mortgage costs, service charges.
RV or property costs between £15,001 and £51,000 per annum RV or where no RV rent/ mortgage costs, service charges.
RV or Property costs up to £100,000 to be made to business applicants in exceptional circumstances Exceptional circumstances are: Business closed completely 100% income lost from 18 March 2020 - to 4 July Must meet all 3 conditions - RV, income and closure.
34.For an application to be considered, we require businesses to demonstrate that they meet the eligibility criteria stated above. We anticipate that to do this, you will need to provide:
35.Evidence of property costs such as rent, rates or mortgage payments above the de-Minimis level of £250 per month (see table above). This should take the form of leases / agreements showing an obligation to pay and bank statements showing that payments have been made.
36.Evidence to demonstrate a substantial loss in income as a result of the COVID-19 crisis. This is likely to be in the form of field accounts for previous years and management accounts / bank statements for the current period.
37.Evidence of complying with the definition of a small or micro business.
38.Confirmation that the business has not received any grant under the grant schemes mentioned in sections 12-14 above.
39.Confirmation of State Aid compliance. Please see further government guidance on this via this link (Section 45-50): https://assets.publishing.service.gov.uk/government/uploads/system/upload s/attachment_data/file/885011/local-authority-discretionary-grants-fundguidance-local-government.pdf
The Application Process
40.There will be a closing date of Sunday 12th July 2020 (midnight) for businesses to apply for this final discretionary grant funding.
41.Applications will then be assessed against eligibility criteria and decided and awarded by the Council as soon as practicable in relation to the number of grants applications received.
42.If further funding is provided by the Government, there will be further application rounds. Businesses that received grant funding previously are likely to be ineligible from any further grant application.
43.We are expecting this round of grant funding to be oversubscribed so it is important all businesses applying give as much information as possible and ensure they meet the criteria.
44.As a condition of funding we will expect the business applying to sign a declaration stating that they are not committing any fraud and that they are fully complying with any state aid limits.
45.Also, the Council will investigate if any business applying shall be liable for business rate, if not already liable, if applicable. Conditionality of funding will be dependent on the business applying being committed to this.
46.Senior Officers of the Council, namely the Deputy Group Head of Customer Services and Economic Development Manager, will report to the Council's Section 151 Officer (Chief Finance Officer) making recommendations to award grants.
47.The decision of the Grant will be final. A business can only challenge a grant decision on a point of law through the courts.
48.All decisions of the Grant Award will be communicated by email to businesses.
Payments of Grant
49.All payments of grant will be made by a BACS transfer to the company or business nominated bank account. As part of the application process organisations must provide documentary evidence that it is their bank account - for example a redacted image of their bank statement showing clearly the business name and account details
50.These payments are Grants and not Loans, and therefore will not require repayment, unless fraudulent activity is detected.
51.Grant income received by a business is taxable therefore funding paid under the Local Authority Discretionary Grants Fund will be subject to tax.
52.Only businesses which make an overall profit once grant income is included will be subject to tax.
Managing the risk of fraud
53.Spelthorne Borough Council will not accept deliberate manipulation and fraud - and any business caught falsifying their records to gain grant money will face prosecution and any funding issued will be subject to claw back, as may any grants paid in error.
54.All information is subject to internal and external audit checks. Sharing Information
55.By applying for a discretionary grant all applicants give authority to administering Local Authorities to share data for efficient system administration and to protect the Public Purse, subject to the GDPR. This will include sharing data with Surrey and other Local Authorities.
56.The Council's will be required to share data with Government Departments for monitoring and other reasons. By applying for a discretionary grant all applicants give authority for this.
Other information
57.Grant income received by a business is taxable, therefore funding paid under the Local Authority Discretionary Grants Fund will be subject to tax. Only businesses which make an overall profit once grant income is included will be subject to tax.
58.Grant income may also affect the amount of benefit you can receive. 59. The Councils do not accept any liability for any issues that may arise for businesses because of applying for, receiving, or not receiving grant payments under this scheme.

 

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