Stop short-changing London with Covid business grants, town hall chiefs demand

  • london
  • November 23, 2020
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welve town hall chiefs in London today joined forces to demand that the Government stop short-changing the capital with less generous Covid-19 grants which are aimed at preventing thousands of businesses going bust.

They warned that a flaw in the £1.1 billion Additional Restrictions Grant risks harming efforts to save crisis-hit firms in London and the city’s ability to act as a “driver for a national recovery” as the coronavirus epidemic eases.

The Standard revealed last week how swathes of central London and other boroughs are losing out in payments from the Additional Restrictions Grant (ARG) which makes payments for firms which are allowed to stay open but are struggling to survive.

Each council gets grants worth around £20 per head of their local population which can be used to support businesses such as food shops, newsagents, DIY stores, garages, laundrettes, dry cleaners and garden centres.

However, given that many parts of London have far more firms than other parts of the country, it means that areas in the capital are getting as little as just over £8 on average per business, the case in the City of London, compared to over £1,140 in one part of Wales.

Six of the ten areas receiving the lowest sums on average per business are in the capital, including City of London, Westminster, Camden, Kensington & Chelsea, Islington and Hackney.

Twelve town hall chiefs, whose areas include three million Londoners, have now written to Business Secretary Alok Sharma stressing the need to “review and urgently enhance” the formula and eligibility criteria of the ARG so the capital is not being deprived of crucial funding.

In a letter organised by the Central London Forward group, they emphasised: “This formula significantly disadvantages those areas which have a high business to resident ratio, and in particular central London – where it is more expensive to run a business and where businesses are most in need of support during a lockdown in which people are discouraged from travel.

“Whilst the situation in the City of London is most acute, this is an issue right across the central London.  

“In boroughs such as Southwark, Kensington and Chelsea, Camden, Westminster, Tower Hamlets, Lambeth, Islington, Hackney, Haringey, and Wandsworth with high business to resident ratios, we are staring in the face of a formula that works out to be as low as £100 to £200 per business.

“This compares to counties in Wales, Scotland and England getting support up to five times greater. Not the support London deserves, and not the support that will make sure London can maintain its position as driver for a national recovery.”

The letter is signed by Cllr Elizabeth Campbell, chair of Central London Forward and Leader of Kensington and Chelsea Council, Jack Hopkins, Leader of Lambeth Council, Cllr Richard Watts, Leader of Islington Council, Cllr Kieron Williams Leader of Southwark Council, Cllr Rachael Robathan, Leader of Westminster City Council, Cllr Georgia Gould, Leader of Camden Council, Catherine McGuinness, Chair of City of London’s Policy and Resources Committee, Cllr Ravi Govindia Leader of Wandsworth Council, Philip Glanville, Mayor of Hackney, John Biggs, Mayor of Tower Hamlets, Cllr Joseph Ejiofor, Leader of Haringey Council, and Damien Egan, Mayor of Lewisham.

An analysis of the ARG by the office of Nickie Aiken, Conservative MP for the Cities of London and Westminster, showed the average funding per business is just £8.09 in the City of London.

Westminster is second lowest at £100.9, followed by Camden £163.63, Kensington & Chelsea 5th lowest on £228.09, Islington 7th on £229.01 and Hackney 9th on £251.67.

This compares to an average of £485.85 for the UK, and a staggering £1,140.60 in Blaenau Gwent in Wales, £960.49 in Inverclyde in Scotland, and £953.49 in Sunderland.

London’s average per business is put at £337.36, compared to £438.85 for the South East, £459.56 for the East, £476.27 for the South West, £525.60 for the East Midlands, £534.83 for the West Midlands, £549.79 for the North West, £581.51 for Yorkshire and the Humber, £595.70 for Wales, £614.91 for Scotland, and £747.20 for the North East.

A Business Department spokesman said: “The Government has supported businesses right across the UK, including those in London, where by the end of the month we will have provided councils with the largest amount of funding of any region in England – over £370 million.  

“This latest grant funding sits alongside a wide ranging economic support package, including extending the furlough scheme and reducing VAT for businesses in many sectors.”