Criticism as applications for second section of hospitality grants open in new year
Delays to paying some business support grants have been branded “simply not good enough”.
Tighter restrictions due the pandemic are due to come into force on Friday, with a range of grants to affected businesses also announced to help out over 10,000 entities. The support is split into two funds: a £160m Restrictions Business Fund and a £180m sector-specific Economic Resilience Fund grant scheme.
On Monday we asked the First Minister about the range of support offered to the hospitality and other sectors, with draft proposals seen over the weekend by Wrexham.com welcomed by some but with concerns over possible turnaround times of the application and payout.
We asked the First Minister if payments before Christmas was a guarantee, and would that be for both the business rates element of support as well as the ‘Economic Resilience Fund’ section of grants processed by Business Wales.
The First Minister said, “In relation to how quickly we can get the money from our hands to the hands of the people who need it, I am hugely grateful to our local authorities they they’re working really hard already on getting the money that we provided during the firebreak out to people who need it. This is the time of year when normally they would be focusing on collection of council tax and non-business rates as well.”
“Talks over the weekend did give us some further assurances, that with some extra help that we will provide to them, that they are confident that they can be making payments this side of Christmas.
“The Business Wales payments are probably are not in that category because they involve a more ‘apply and consider the application’ approach to the money, whereas the local authorities, it’s a matter of rateable value and are fairly automatic payments as a result.”
“We are they are keen to get as much of this money out of our hands and into the hands of people who need it as fast as we can practically do so.”
Late afternoon yesterday a written statement from Economy Minister Ken Skates confirmed the business rates element of the grant would be pushed out as soon as possible, this side of Christmas.
The statement also detailed the process for the second section of grants, saying that the eligibility checker for that package would be live by 11th December and the application process “will open in January”.
The First Minister was challenged on the January timeframe at First Minister Questions yesterday, with Conservative Leader Paul Davies MS asking, “You will have to forgive businesses across Wales if they’re not entirely confident that they’ll get the help that they need. The shambolic handling of the Economic Resilience Fund phase 3 must not be allowed to be repeated.”
“However, we’ve just heard from your Economy Minister that businesses will not be able to apply for financial support until January. First Minister, that is simply not good enough. Do you seriously believe that businesses will survive this period, given that they will not be able to access support until January, and, therefore, will you now reconsider this catastrophic decision and ensure that businesses get the help they need now and not in four or five weeks’ time?”
The First Minister replied, “Of course we will do everything we can, working with our hard-pressed colleagues in local government, to get the help that we have announced into the hands of those who need it, as fast as we possibly can. Most people who work in the sector recognise the scale of the help that is being made available to them, the efforts that are being made to put that help where it is most needed, and the fact that, by acting in the way that we have, we are protecting both the health of people in Wales and the long-term prospects of those businesses.”
Yesterday Wrexham.com asked Council Leader Mark Pritchard about the local effort to get the first section of business rates grants out, he told us: “What I want to make clear to all the businesses in Wrexham is that we worked tirelessly last time to get payments out and will work tirelessly this time to get them out. We understand how important it is that the money is paid between now and Christmas and over into the New Year.”
The full written statement from the Economy Minister is copied below for reference as it contains further detail on the specifics of the grants:
Throughout this Covid-19 crisis, the Welsh Government has worked hard to support businesses and employees in Wales impacted. We have provided help over and above what is available at a UK Government level through the most generous package of support for business anywhere in the UK.
The Welsh Government has allocated more than £1bn to support businesses through rates relief for the retail, leisure and hospitality sectors and Non-Domestic Rates (NDR) linked grants. We have also previously allocated over £600m to support businesses through phases 1, 2 and 3 of our Economic Resilience Fund, and the Cultural Recovery Fund and the Sport and Leisure Recovery Fund. This has resulted in businesses receiving support via grants, as well as the Development Bank of Wales’ loan scheme and skills support.
Yesterday, the Welsh Government announced a further substantial support package of £340m for businesses materially impacted by the set of new targeted restrictions in the hospitality, tourism and leisure sectors coming into effect from 6:00 pm on 4 December 2020. This increases the support made available for businesses and their employees in Wales since the start of the Covid-19 pandemic to around £2bn which is additional to support available from the UK Government through, for example, the Job Retention Scheme and Self-Employed Income Support Scheme.
The first element of this latest package of support is a £160m Restrictions Business Fund which is expected to support around 60,000 hospitality, leisure, tourism and retail businesses across Wales affected by the restrictions. The Restrictions Business Fund will provide the following financial support:
Businesses in the hospitality sector that are in receipt of Small Business rate relief (SBRR) and have a rateable value of £12,000 or less will be eligible for a £3,000 payment. Tourism, leisure, retail and supply chain business qualifying for SBRR will also be eligible for this support if they have greater than 40% reduction in turnover during the restriction period.
Hospitality businesses with a rateable value of between £12,001 and £51,000 will also be eligible for a £5,000 payment if impacted by the restrictions. Tourism, leisure, retail and supply chain business in the same rateable value bracket will also be eligible for this support if they have greater than 40% reduction in turnover during the restriction period.
Hospitality businesses with a rateable value of between £51,001 and £150,000 will also be eligible for a £5,000 payment if impacted by the restrictions. Tourism and leisure business in the same rateable value bracket will also be eligible for this support if they have greater than 40% reduction in turnover during the restriction period.
Discretionary Support will continue to be available through local authorities in Wales for those businesses that are materially impacted. As was the case for the Firebreak, this will be targeted at businesses that are not on the NDR system and therefore not eligible for the NDR linked grants. The grant level for this strand will be set at eligible costs of up to £2,000 (typically £1,500) per business. This will also provide support to sub VAT sole traders without a property who are materially impacted by more than a 40% reduction in turnover as a result of the restrictions.
The Welsh Government will work with local authorities to ensure that, where possible, payments are made to impacted sectors as quickly as possible before Christmas.
The second additional element of support being made available in this latest package is exclusively targeted at hospitality, tourism and leisure businesses or supply chain companies materially impacted. This will be run in parallel and in addition to NDR linked grants to provide help to up to 8,000 hospitality businesses, with the potential to support a further 2,000 in the supply chain.
This additional element will be available to hospitality, tourism and leisure businesses materially impacted with greater than 60% impact on turnover as a result of the restrictions. It will be open to companies that are VAT registered, limited companies with turnover above £50,000 and employing staff via PAYE.
If a business meets the above criteria, the package would provide the following:
For Small and Medium Enterprises (SMEs): £1,500 will be available per employee up to a maximum of 10 employees, representing £15,000 or – for those employing more than 10 – £1,500 per employee or self-declared operating costs for the restricted period (whichever is the lower amount). There will be an upper limit of £100,000 for SMEs, with a digital system based application. For micro businesses with one employee only, the minimum grant will be £2,500
For Non-SMEs: £500 will be available per employee up to a maximum of £150,000, with a manual case by case application through Business Wales.
The eligibility checker for this new package will be live by 11 December 2020 and the application process will open in January.
The Business Wales service and the Development Bank of Wales continues to be available to support businesses through a range of support options. Business Wales can provide practical information and advice to any businesses experiencing issues because of coronavirus, such as supply chain delays or staffing matters. Support is provided virtually – by phone, video calling and digitally including webinars.
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