A fifth (20%) of the Covid-19 Additional Relief Fund (CARF) had still not been allocated to businesses as of the deadline date of 30 September 2022, according to the government’s latest official data.
While 75 local authorities (LAs) had paid out all their grant allocations, this represents less than 25% (24.3%) of the 309 LAs in England. Some LAs struggled to award even 10% of their allocation, and 22 still had not paid out anything as of the deadline – only six of which stated their schemes had been approved.
So, what went wrong with this scheme? The government announced the £1.5bn relief fund in March 2021 to compensate those businesses impacted by Covid-19 and denied the chance to appeal their business rates on grounds of material change of circumstance (MCC) – a move we lambasted at the time.
The new fund was for businesses outside the retail, hospitality and leisure sectors, and would be distributed by LAs to “get cash to affected businesses in the most proportionate and equitable way”.
And herein lay the problem. The government severely misjudged not only the size of the problem but also the capability of all LAs to pay out in an efficient and consistent way. It gave no standard guidance for allocation and distribution of the fund, allowing LAs the discretion to allocate funds as they saw fit. Each, therefore, put in place its own deadline dates and criteria for application, and whether or not a business received relief effectively became a postcode lottery.
Some businesses applying for funds found themselves ineligible in some boroughs (but not in others) because they had already received some reliefs. Applications were in most cases difficult and time-consuming and, for some, came too late to be of any real help. And businesses with multiple properties struggled to deal with different LAs with differing criteria, information requests and deadlines.
In many ways, the results were inevitable. What was the government thinking if it was serious about providing relief? It would surely have been much better for businesses if they had been allowed to appeal their rates bills under the MCC rules at the appropriate time.
John Webber is head of business rates at Colliers
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