Colliers Questions Lack of Urgency of Many Local Authorities in Handling Out Covid-19 Grants: Five Weeks in and nearly 40 per cent of Grants Not Yet Paid Out

Manchester City Council issues 37 per cent of its total allocation of grants while Liverpool City Council pays 55 per cent

North West – April 30th, 2020.

Business rates experts at real estate advisors Colliers International are concerned about the lack of urgency many local authorities including Manchester City Council and others in the North West of England are showing in paying out much needed grants to businesses during the Covid-19 pandemic and about how fairly many of these have been allocated.

According to latest data published by the Government, five weeks after the grants were announced, 38 per cent of the amount allocated to local authorities to pay to businesses has not yet been paid out. The 62 per cent paid represents £7.6bn of the total of £12.33bn – an increase from the 49 per cent figure of paid-out grants announced last week.

Colliers has analysed the percentage of grants actually paid to businesses compared to what the local authorities have been authorised to allocate and have found massive discrepancies across the country:

• Of the major cities in the North West, Manchester City Council has paid out the least in grants by distributing 37 per cent or £45.3m of its total allocation from the Government of £121m.
• Elsewhere in the North West of England, Liverpool City Council paid 55 per cent or £59.7m of its grants valued in total at £107.8m; Preston City Council issued 39 per cent or £13.7m of its total of £34.9m; Salford City Council issued 46 per cent or £21.9m of its total allocation of grants valued at £47.4m; Bolton Council distributed 64 per cent or £43.8m of its allocation of £68m, while Trafford Council paid 70 per cent or £33.3m of its allocation of £47.5m and Rochdale Borough Council issued 73 per cent or £34.1m of its total of £46.7m. Other percentages paid out by local authorities in the region in order of rising percentages were Barrow (34 per cent); Sefton (42 per cent); Burnley (53 per cent); Wigan (54 per cent); Bury (55 per cent); Fylde (55 per cent); Oldham (56 per cent) Wirral (56 per cent); Tameside (57 per cent); Blackpool (57 per cent); Lancaster (58 per cent); Cheshire east (59 per cent); South Lakeland (59 per cent); Pendle (60 per cent); St Helens (61 per cent); Knowsley (61 per cent); Blackburn with Darwen (63 per cent); Chorley (66 per cent); Stockport (68 per cent); Warrington (71 per cent); Cheshire West and Chester (71 per cent); Hyndburn (77 per cent); Rossendale (78 per cent) and Ribble Valley (80 per cent).
• The most efficient place in the country in paying out its allocated grants is the London Borough of Ealing, which has paid out £64m or 94 per cent of the £68.2m it was allocated to distribute.
• Alongside Manchester, Birmingham City Council has also paid out 37 per cent of its total allocation of grants, representing £86.1m from a total of £231.5m, almost double the number of grants for Manchester.
• One of the worst places is Sandwell Metropolitan Borough Council in the Midlands, which has paid out less than a quarter of the grant monies allocated – just £17.27m of a total allocation of £73m, representing 24 per cent.
• The UK’s cities vary widely as to how successful they have been in allocating their grants. Cities who beat the national average include Cambridge (78%), Reading (74%), York (84%), Newcastle (71%), Bristol (76%) and Leeds (69%).
• However, Slough (28%), Nottingham (49%), Manchester (37%), Sheffield (49%) have still paid out less than half their grants. Along with Liverpool at 55 per cent they still have some way to go.
• The Council with the biggest allocation of grants to hand out is Cornwall Council – with £281.45m to allocate to 23,828 properties (of which it has allocated £194.825m or 69%.) This implies that there are more small businesses and retailers claiming rates relief in Cornwall than in any other part of the country. To quote John Webber, head of business rates at Colliers International: “That’s a lot of holiday homes businesses!”
• Although Westminster City Council appears to have been efficient handing out 93 per cent of its grants, it only had £78m to distribute to a total of only 4,536 businesses – of which £72.79m has been given out. And the City of London’s numbers are even more extraordinary – with only 968 businesses eligible for the grants or £14.74m to allocate, or which 81 per cent has been distributed.

The Covid-19 Grants, announced on March 24^th, were designed to cover a business’s fixed costs and promised:

• A grant of £10,000 for all businesses in receipt of small business rates relief or rural rates relief.
• Businesses in retail, leisure and hospitality to receive a grant of £10,000 if they have a rateable value up to and including £15,000 and a grant of £25,000 with property with a rateable value between £15,000.01 and less than £51,000. This is paid per property.

Colliers has been campaigning that purely using the business rates system as a means of allocating the grants has meant thousands of small businesses have missed out.  In particular, the firm has written to the Treasury asking it to show flexibility to those SMEs that rent space in serviced offices, who usually pay one fixed all-inclusive monthly service agreement to their office provider to cover rent, rates and service charges, and therefore do not have an individual businesses rates assessment.. As a result, many such companies are thus not eligible for their much needed grants.

According to John Webber: “Small businesses and retail are the lifeblood of the economy and in these difficult times, many are struggling to stay solvent. Without the grants on offer, even more will go under. The fact that Manchester City Council has still not allocated 63 per cent of its total grants is concerning – especially when considering what an important part of the local economy these sectors represent.”

He continued: “We urge local authorities to dish out the grants more efficiently and quickly. A week ago, less than half (49%) of grants had been issued. Whilst it’s good to see this figure is now above 60 per cent nationally, it is now over five weeks since the grants were announced. In these turbulent times, five weeks is an awful long time to be without funds and for nearly 40 per cent of grants not to be distributed.  In the North West there are many boroughs below the national average in terms of allocations and we urge those boroughs with the lower percentages to improve efficiency as soon as possible.”