Not a single penny of nearly £1m allocated to help local firms has been paid out
‘GET A GRIP’: Liberal Democrat leader Vince Cable said the delay was ‘completely unacceptable’
By Grimsby Telegraph | Posted: 23 Aug 2017
Nearly £1 million of cash designed to support businesses in North Lincolnshire has gone unpaid – despite the money being available for months. Parliamentary Correspondent Patrick Daly reveals why
BUSINESSES across the country were stunned at the turn of the year to discover their tax bill was being hiked up.
For many, the effects of the recession still lingered with profits harder to come by – but yet letters came through the post letting them know that their business rates were going to be increased.
Business rates are a form of ground tax paid by shops or firms, based on how much the property they occupy is worth – something determined by its ‘rateable value’.
It is not the government that determines rateable values, but the Valuation Office Agency (VOA), an independent body.
But that didn’t stop a huge backlash from the business community being felt in Westminster, with everyone from high street retailers and pub landlords to small business owners imploring the Treasury to step in.
Chancellor Philip Hammond, in his Spring Budget, did exactly that and set-up a £500 million national fund to help those businesses which were expected to be worst hit.
But now, five months on, the Telegraph can reveal that not a single penny of the nearly £1 million allocated to councils in North Lincolnshire has been paid out.
On top of this, businesses have not even been informed that they are eligible for help with their increased rate bill.
North East Lincolnshire Council (NELC) has been handed a cash pot from the Government worth £479,000, which is designed to last for four years.
Out of that, £279,000 is available to affected businesses in the borough during this financial year. NELC confirmed none of the cash had been allocated or paid out.
Another £480,000 has been allocated to North Lincolnshire Council, with £280,000 of that earmarked to be spent upfront during 2017-18 to alleviate the strain on struggling businesses.
According to a Freedom of Information request, North Lincolnshire Council has distributed none of the money to date.
NELC pointed the finger at central government software problems for the delay, saying an awaited upgrade had prevented officials from sending out of the cash to under-pressure companies.
Liberal Democrat leader Vince Cable said the delay was “completely unacceptable” and called on ministers to “get a grip” on the situation.
He said it “beggared belief” that the relief fund was not properly established by the Conservative administration before handing over responsibility to local councils.
“The hardest hit businesses were promised rapid relief to cushion the blow, but five months on most have received nothing,” said the former business secretary.
“That is enough time to wreck many a small independent business, who face having to lay off staff or even go bust.
“This delay is completely unacceptable. The government risks crippling thousands of small businesses through its incompetence.”
But Whitehall sources are privately angered at the council’s suggestion, claiming that other local authorities managed to get round the software issues and were able to transfer the money regardless.
The Department for Communities and Local Government (DCLG) said ministers had been attempting to hurry payments along ever since councils were informed about how much they would receive at the end of April.
A spokesman for the department said: “We've been clear that local authorities should take urgent steps to make sure small businesses benefit from the funding that we announced at the Budget in April.
“There are councils that have pressed ahead and issued revised bills. Others have chosen to wait for software updates to deliver this particular scheme and we've taken steps to make sure businesses get this relief as quickly as possible.”
In June, Local Government Minister Marcus Jones is said to have written to council leaders urging them to make “rapid progress” in implementing the three business rate relief schemes announced at the March Budget – a general scheme, one to support pubs and a specific relief for small businesses.
Mr Jones also met with the creators of the delayed software system on July 12 and encouraged them to speed up delivery of the software update, according to a source.
The suppliers agreed that all councils would get a software roll-out this week, with the first upgrades taking place on Monday, August 21.
A spokeswoman for NELC confirmed it was one of many councils which had been forced to delay an implementation of their business rate relief scheme.
“Delays with some computer software used to administer the programme have prevented many councils, including North East Lincolnshire Council, from putting the schemes in place,” said the spokeswoman.
“The computer system used is a provider to the majority of councils across the UK.
“The latest software release is due, which we understand should sort out the problems.”
The spokeswoman confirmed that no businesses had been alerted to the fact that they could be due financial support for their rate bill due to the technical delays.
“To date, there have been no applications or payments made as the scheme has not been finalised,” she said.
“In September, NELC’s cabinet members will receive a report outlining the introduction of 3 business rate relief schemes, including a proposal for the criteria for a local discretionary relief scheme.
“Subject to cabinet approval, NELC will begin awarding relief on the business rate relief scheme for pubs and the ‘Supporting small business’ relief scheme and inviting applications for the discretionary relief from September onwards – so business rate payers will receive the support within the financial year.”
North Lincolnshire Council was contacted for comment but had not provided one at the time of going to press.