Councils hand out less than half of Omicron hospitality grant cash

£305 million of the cash distributed to 309 English councils had been paid out less than three weeks before the final cut off for applications.

03 April 2022

Hospitality firms in England affected by Omicron have received less than half of the £635 million support package promised by the Government, new analysis has found.

The Treasury announced funding in December to provide a lifeline for businesses suffering from mass cancellations and declining footfall over the Christmas period when the Omicron variant of coronavirus spread.

Local authorities were entrusted to deliver the one-off grants, worth up to £6,000, for businesses in the hospitality, leisure and accommodation sectors.

Yet just £305 million of the cash distributed to 309 English councils had been paid out less than three weeks before the final cut off for applications on March 18, Altus Group’s analysis of official government data shows.

Some 29 councils had failed to distribute a single penny of the allocated grant funding to struggling firms, according to the new figures.

Carlisle City Council and East Herts District Council had both paid to local firms less than £1 for every £10 of the funding they received.

This analysis comes as business rates climbed up on Friday April 1 as the government tapers off its pandemic financial support measures.

Firms across the UK will face a £7.1 billion increase in rates for the year.

VAT levels also returned to 20% on Friday across the hospitality sector after dropping to 5% during the pandemic, in a move likely to push up prices significantly for customers.

UKHospitality boss Kate Nicholls said it “might prove fatal” for business owners.

However, some areas benefited more than others with seven councils paying out more in grants than they received from the government ahead of the scheme closing.

The London Borough of Barnet paid out just under £2.5 million by late February, almost 40% more than it was allocated.

The other six councils which overspent were the City of Bradford Metropolitan District Council, Leicester City Council, Warrington Borough Council, Bury Council, Burnley Borough Council and Barnsley Metropolitan Borough Council.

Robert Hayton, UK president of Altus Group, described the grant scheme as a “post code lottery”.

He said: “These types of businesses saw one of their most valuable trading periods wiped out and simply didn’t get the support they needed quickly enough.

“I just hope councils rallied at the end.”

Councils needed to make all grant payments to eligible firms by March 31 after which grants would not be reimbursed by The Treasury.

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