Following the introduction of more restrictions to slow the spread of Covid-19 in October and November, the UK Government announced four new grant schemes for businesses in England.
Guidance on eligibility and grant rates for these schemes was published on 3 November 2020. This Insight sets out the guidance for each scheme.
Like the business support grants made available in England between March and August 2020, these grant schemes are funded by Government and operated by local authorities. Eligibility for the first three grants is based on the business rates system and the ‘tier’ system of local restrictions. Eligibility for the Additional Restrictions Grant is at the discretion of local authorities.
During the 5 November to 2 December ‘lockdown’ in England, the ‘Closed Addendum’ arrangements apply throughout England, superseding the other schemes.
The new grant schemes are called:
- Local Restrictions Support Grant (Open)
- Local Restrictions Support Grant (Sector)
- Local Restrictions Support Grant (Closed), which also features an ‘addendum’ following the reimposition of England-wide restrictions as of 5 November 2000
- Additional Restrictions Grant
The table below compares the key features of each of these four schemes. A business’s eligibility depends on which restriction ‘tier’ their local area is in. Grants are available to businesses based on the rateable value (RV) of any properties they occupy. One grant is available per occupied property.
The amounts set out in the table are the sums that will be provided by the Government to local authorities
|Scheme name||‘OPEN’||‘SECTOR’||‘CLOSED’||CLOSED ADDENDUM (England-wide)|
|Start date||1 August 2020||1 November 2020||9 September 2020||5 November 2020|
|Eligible businesses||Businesses in tier 2 and 3 areas in the hospitality, hotel, bed & breakfast and leisure sectors.||Nightclubs, dance halls, hostess bars, discotheques, sexual entertainment venues in all areas||Any businesses in Tier 3 areas providing services in person from their premises that are required to close for 14 days or more||All businesses providing services in person from their premises that are required to close for 14 days or more during the England-wide lockdown introduced on 5 November|
|Frequency of payments by Government to councils||28-day payment cycles starting 1 Aug, backdated where applicable||14-day payment cycles starting 1 Nov||14-day payment cycles||28-day payment cycle (initially 5 Nov – 2 Dec)|
|Amount per business available to councils: £15k RV or under||£934 per 28 days||£667 per 14 days||£667 per 14 days||£1,334 per 28 days|
|Amount per business available to councils: £15,001-£50,999 RV||£1,400 per 28 days||£1,000 per 14 days||£1,000 per 14 days||£2,000 per 28 days|
|Amount per business available to councils: £51,000 + RV||£2,100 per 28 days||£1,500 per 14 days||£1,500 per 14 days||£3,000 per 28 days|
|End date||31 March 2021||31 March 2021||31 March 2021||2 December 2020|
The ‘Open’ scheme
The ‘Open’ scheme applies to businesses in Tier 2 and 3 areas which have been impacted by local restrictions but have not been required to close.
Local authorities are explicitly given discretion to decide how to distribute the grants. The guidance requests they prioritise the “hospitality, hotel, bed & breakfast and leisure” sectors, but there will be “no penalty” for those that deviate from this guidance according to local circumstances.
Allocations of funding for this grant to each local authority will be made on the basis of the rateable properties in these sectors in the local authority area, plus a 5% ‘top-up’.
The ‘Sector’ scheme
The ‘Sector’ scheme applies to businesses in sectors that have to close due to national regulations. Paragraph 20 of this guidance states:
It is possible that …further business property types [will be] closed on an England-wide basis. If so, these businesses will also be eligible for these grants once they have been closed for 14 days.
The ‘Closed’ scheme
The ‘Closed’ scheme applies to businesses in Tier 3 areas that have been required to close.
Allocations of funding to local authorities will be based on the number of properties subject to closure in each local authority area. This guidance does not say local authorities can use their discretion to allocate grants in the way set out in the ‘Open’ scheme guidance.
Paragraph 33 states that businesses that do not depend on supplying direct in-person services from their premises are not eligible for the ‘Closed’ grant. Examples include solicitors and accountants.
Paragraph 45 of the guidance states that pubs and bars that operate click-and-collect services are to be treated as closed and therefore eligible for the grant.
The England-wide scheme
The ‘Addendum’ to the ‘Closed’ guidance applies the Closed grant scheme to the whole of England from 5 November to 2 December.
Following this period, all parts of England will return to the tier of restrictions that they were in on 4 November (see paragraph 12 of the Addendum guidance). Support grants will be available on the same basis as before 4 November. For instance, businesses in a locality that reverts to Tier 2 on 3 December will be able to access grants from that date on the basis set out in the ‘Open’ guidance.
Additional Restrictions Grant
The Additional Restrictions Grant (ARG) consists of a one-off grant of £20 per head to each district or unitary council. The ARG emerged from the ‘deals’ that were negotiated with individual areas during September and October when they were required to move into Tier 3. The funding can be used in financial years 2020-21 and 2021-22, and it can be used for general “business support activities”.
As of 4 November, the ARG has been made available to the whole of England.
In the Closed, Open and Sector schemes, grants will be payable to businesses in 14-day periods. Businesses can only become eligible once a new 14-day payment cycle has begun, not in the middle of one.
Eligibility for all of the schemes is determined by local authorities, and is subject to State Aid restrictions.
All the guidance notes place extensive data collection and local assurance requirements on local authorities, which will provide data on the distribution of the grants in due course.
These grant schemes are to remain in place for the rest of the 2020-21 financial year.
About the author: Mark Sandford is a Senior Research Analyst in the House of Commons Library.
With thanks to Mike Heiser of the Local Government Association for comments on an earlier draft.