In our earlier blog we covered Alok Sharma’s announcements regarding the Local Authority Discretionary Grants Fund (LADGF). The Government said it would issue further guidance to LAs, and it did this yesterday.

The LADGF aims to help small and micro businesses that were not eligible to receive the Small Business Grant Fund (SBGF) or the Retail, Hospitality & Leisure Grant Fund (RHLGF) or other forms of government support such as SEISS. The exception is the Coronavirus Job Retention Scheme (CJRS). Businesses in receipt of CJRS are eligible.

The guidance indicates that LAs may give grants to the value of £25,000, £10,000 or any amount below £10,000. For amounts below £10,000, the LA can adapt its approach to meet its own local circumstances, such as  providing support for micro-businesses with fixed costs or support for businesses that are crucial for their local economies but it is asked to make the criteria in determining eligibility and the level of grant clear, setting out the scope of their discretionary grant scheme on their website.

The government guidance suggests the following businesses are likely to benefit: –

  • Small and microbusinesses that are not in receipt of SBCF or RHLGF or SEISS.
    • Small businesses are those where 2 of the following apply:
      • turnover ≤£10.2m, balance sheet ≤£5.1m employees≤ 50.
    • Microbusinesses are those where 2 of the following apply:
      • 2 out of turnover ≤£632k, balance sheet ≤£316k, employees≤10
    • Have high ongoing fixed property related costs
    • Suffered a significant fall in income due to Covid-19
    • Occupy property, or part of a property with a rateable value, annual rent or mortgage payments below £51,000.

The guidance stresses that the fund is discretionary but does ask LAs to prioritise the following types of business:

  • Small businesses in shared offices or other flexible workspaces. Examples could include units in industrial parks, science parks and incubators which do not have their own business rates assessment
  • Regular market traders with fixed building costs, such as rent, who do not have their own business rates assessment
  • Bed & Breakfasts which pay Council Tax instead of business rates
  • Charity properties in receipt of charitable business rates relief which would otherwise have been eligible for Small Business Rates Relief or Rural Rate Relief

LAs are encouraged to collaborate with Local Enterprise Partnerships to ensure consistency, alignment and reduce duplication. We suggest if you think you may be eligible for this support, you contact your local authority to understand their local application process.

Local Authority Discretionary Grants Fund – guidance for local authorities

Wayne Thomas comments:

“This discretionary grant fund could offer a lifeline to the smallest and arguably most vulnerable businesses. As the guidance has only just been published, the LAs may not yet have the processes in place for application, but we encourage businesses to check their LA websites regularly for news on this grant”.

Update 29 May: The government has now published guidance on how to apply for the Local Authority Discretionary Grant Fund. The guidance asks those who believe they may be eligible to see their Local Authority websites for details on how to apply. Derby City Council – our Local Authority – is inviting applications now. The scheme will be open between the 29 May and 19 June and businesses will have 21 days to apply.