Harrogate council halts Covid business grants scheme due to 'very high' demand

A "very high number" of Harrogate businesses applying for coronavirus support grants could mean the council runs out of cash under one scheme sooner than expected.

Thursday, 18th March 2021, 11:31 am
Updated Thursday, 18th March 2021, 11:32 am
Harrogate Borough Council says the number of claims for Covid grants has been 'far more than anticipated'.

Harrogate Borough Council was allocated £4.6m as part of the government's Additional Restrictions Grant (ARG) scheme to help firms forced to close during lockdown and has handed out more than £2m in two phases of payments.

It had planned to open a third phase tomorrow but now says this is "on hold" because it is still working through a backlog of applications.

And because the council is not expecting any further grant money from the government under this scheme, it could mean some businesses expecting a third and final payment later this month may not get it.

"We received a very high number of applications in phase two, far more than anticipated, and we are continuing to work hard to complete assessment of these," the council said.

"Until we have assessed and awarded all the grants in phase two we are unable to commit to a further grant funding phase."

The high number of businesses asking for financial support shows just how seriously the strain of the pandemic is still being felt in Harrogate's shutdown sectors of the economy and could mean all of the £4.6m is used up before the third phase is opened.

Some business owners who had been expecting a third payment told the Local Democracy Reporting Service that the grants will be "the difference between survival and closure" for many firms as they also called on the government to provide more support.

A Harrogate Borough Council spokesperson said: “We recognise that many businesses across the district are relying on this financial support for their survival, so that’s exactly why we’ve been working as hard as possible to get money out the door.

“In total, across all schemes since the first lockdown, we’ve distributed £70 million to more than 5,000 businesses.

“There are strict criteria for the various grant schemes, and the different phases of those schemes, and we’ve had to make sure businesses are eligible for the support on offer."

Under another scheme, the Local Restrictions Support Grants, the council was allocated £23m and up to the end of February had paid out £18.5m.

Almost £100,000 has also been paid out to pubs that do not serve food and are eligible for a one-off payment of £1,000.

Harrogate Borough Council said it was now keen to signpost towards the government's Restart Grant which will aim to help businesses get back on their feet as lockdown is lifted.

Non-essential retail businesses which will be able to reopen from 5 April will receive grants of up to £6,000, while hospitality and leisure businesses will receive up to £18,000 before they make a full return on 17 May.

For more information go to www.harrogate.gov.uk/business-investment

By Jacob Webster, Local Democracy Reporter