COVID-19 Additional Restrictions Grant Policy (discretionary payment scheme), November 2020

1. Introduction

1.1. In response to the COVID-19 pandemic, in October 2020, the government announced a further package of financial assistance to support businesses in their local area under Local Covid Alert Level Very High (LCAL3) or national restrictions.

1.2. On 31 October 2020, the government announced the introduction of the Additional Restrictions Grant (ARG). This is a discretionary scheme which, in part, has been introduced to support businesses that are not eligible for the Local Restrictions Support Grant (closed) (LRSG). The LRSG is only eligible to retail, hospitality and leisure businesses that are mandated to close and are within the business rates system. Both schemes are to be administered at a local authority level.

1.3. On 5 November 2020 England entered into a 28-day period of national restrictions. This period is currently understood to come to an end on 2 December 2020.

1.4. This new discretionary scheme allows local authorities increased discretion, with minimal national qualifying criteria being stipulated by the government.

1.5. The government has provided written guidance to local authorities on the requirements of the Discretionary Grants Scheme. Links to that guidance are included later in this policy.

2. Aim of this policy

2.1. This policy sets out the approach that will be taken by Huntingdonshire District Council in relation to the Additional Restriction Grant Scheme. It aims to support qualifying local businesses that have been adversely impacted by the current national restrictions which were imposed on 5 November 2020.

2.2. The policy seeks to provide clear guidance to potential applicants about the nature of the fund, the eligibility criteria, the types of businesses that this scheme is designed to assist and the level of grant funding that will be available.

2.3. This policy should be read in conjunction with the government guidance which has been issued to all local authorities in order to enable them to develop their local level scheme.

2.4. Government guidance - Local Restrictions Support Grants (LRSG) and Additional Restrictions Grant (ARG): guidance for local authorities.

3. Administration of the Additional Restrictions Grant Scheme

3.1. Huntingdonshire District Council is responsible for administering the Additional Restrictions Grant Scheme to eligible businesses within its geographical boundary.

3.2. Under the Additional Restrictions Grant, the government will allocate a one-off lump sum based on £20 per head of the population (ONS 2019 Mid-Year population estimates) in each eligible local authority when LCAL Very High or national restrictions are imposed. All local authorities in England are now eligible under the scheme due to the national restrictions coming into force on 5 November 2020.

3.3. The above-mentioned sum is a one-off lump sum payment. As such, if a local authority exits LCAL Very High or National Restrictions and then re-enters at a later date, it will not receive an additional payment.

3.4. Local authorities have the discretion to use funds for wider business support initiatives. As such, other initiatives or schemes will be implemented alongside this grant scheme at Huntingdonshire District Council’s discretion.

3.5. The funding for this scheme can be used across financial years 20/21 and 21/22. Huntingdonshire District Council has until 31 March 2022 in which to identify usage of this sum.

4. Businesses that will be supported under Additional Restrictions Grant Scheme

4.1. Additional Restrictions Grant – businesses that have previously been eligible to receive grant payments under the Local Authority Discretionary Grant Fund (LADGF). On 16 December 2020, the Scheme was extended 'Additional Restrictions Grant Extension', to include a broader range of businesses.

5. Eligibility criteria for the Discretionary Additional Restrictions Grant Scheme

5.1. Ineligible businesses:

Businesses that are eligible for a payment under the Local Restrictions Support Grant (closed) (for ARG)

Businesses that are subject to strike off notice, insolvency, or administration.

A business with a trading address which is not within the local authority area of Huntingdonshire District. Not to be confused with a registered address, a trading address is the address detailed on a company’s invoice and the address to which customers, banks or suppliers correspond.

5.2. Eligible businesses:

Businesses which were previously eligible for a grant under the Local Authority Discretionary Grant Fund (LADGF). A business may be eligible to receive a Support Grant because their business was ordered to close by the government on 5 November 2020.

5.3. Businesses which may be eligible for an award will be those which have previously been awarded grants under the Local Authority Discretionary Fund (LADGF). They must not be registered for business rates, they must be in the business sectors listed below and have been required to stop, significantly change or reduce their normal operations in order to comply with lockdown regulations. These business sectors are:

  • bed and breakfast businesses
  • charities and
  • businesses that normally operate within a shared workspace. Huntingdonshire District Council will be using the List A and List B (government guidance on nationally restricted businesses) to determine eligibility of shared workspace applications.

All of the above must have their business based within the Huntingdonshire district area.

  • Market traders who are regular attenders at recognised markets in the district may be eligible too.

5.4. Businesses must have been trading on 4 November 2020.

5.5. Applicants to this scheme will be required to make a legal declaration that they meet the above eligibility criteria.

5.6. For the Additional Restrictions Grants Extension Scheme, to be eligible, your business must:

  • operate in Huntingdonshire
  • have been open for business as usual before the national restrictions came into force on 5 November 2020
  • have experienced a significant loss of income (over 30%) directly related to the national lockdown restrictions

All charities without a Business Rates number are eligible to apply for a grant. Charities do not have to demonstrate a significant loss of income.

You should apply for the Additional Restrictions Grant Extension if you operate from premises:

  • that do not have a rateable value and you have been required to close by law because of national lockdown measures, for example if you pay rent to a ratepayer for a shared space

  • where you do not pay business rates and have not been forced to close due to the national restrictions, but your business has been adversely impacted because of the lockdown. For example, your business may form part of the supply chain for other businesses that have been forced to close. In this category your business will need to demonstrate reduced sales, revenue or income of 30% or more to qualify

  • where you pay business rates and have not been forced to close due to the national restrictions, but your business has been adversely impacted because of the lockdown. For example, your business may form part of the supply chain for other businesses that have been forced to close. In this category your business will need to demonstrate reduced sales, revenue or income of 30% or more to qualify.

5.7. Applicants to the scheme(s) will be required to make a legal declaration that they meet the eligibility criteria.

6. Amount of individual grants that businesses will receive

6.1. For Additional Restrictions Grant, Huntingdonshire District Council has been awarded a one–off allocation and, at this time, no further monies are expected from the government to support businesses in circumstances where similar national restrictions are applied.

6.2. Each recipient business to this grant payment scheme (ARG) will receive a one-off payment of £2000. The council is reserving the balance that remains to support activities linked to the economic growth strategy to provide longer term and sustainable support to the businesses and the economy. A plan for the use of the remaining funds will be prepared once the economic growth strategy is published.

6.3. For Additional Restrictions Grant Extension, each recipient will receive a one-off payment of £2000. There is a limited fund for both ARG and ARGE Schemes and as such, is on a first-come first-served basis.

7. Application Process

7.1. Applications for a grant under both Schemes will be accepted via an online form.

7.2. The ARG and ARGE Schemes will close at 23:59 on 31 Jan 2021. However if funds are fully allocated before 31 Jan 2021 we will update our website. However, if the ARGE fund is fully allocated before 31 January 2021 we will update our website and will stop accepting applications. Any claims in progress that are not completed before the funding is fully allocated will be placed on hold and may receive alternative funding if it becomes available.

7.3. It is the intention of Huntingdonshire District Council to avoid undue burden and complexity on businesses in respect of the application process. However, to meet the council's obligations on proper use of public funds, appropriate evidence will be necessary in support of an application to demonstrate the eligibility criteria outlined in this policy is met and to assist the council in making an informed decision on the award of a grant.

7.4. The on-line application form will identify the evidence requirements in line with those set out above in section 5.

7.5. The decision of the council in respect of the award of or refusal of a grant will be final. There will be no appeal process.

8. State aid

8.1. The United Kingdom left the EU on 31 January 2020, nonetheless under the Withdrawal Agreement the State aid rules continue to apply during a transition period, subject to regulation by the EU Commission. Therefore, the council must be satisfied that State aid requirements are met before grants can be paid out to individual applicants.

8.2. Under De Minimis rules an organisation is permitted to receive up to the equivalent of €200,000 of aid within a three-year period.

8.3. Where the threshold of €200,00 has been reached, payments can still be made in line with the COVID-19 Temporary Framework for UK Authorities, which has been introduced to support businesses during the current COVID-19 outbreak. This temporary framework permits an organisation to receive up to the equivalent of €800,000.

8.4. Where an applicant is below but close to that threshold, the grant award will be set at such an amount as to ensure that the applicant does not exceed this threshold.

8.5 As part of the application process, all applicants will be asked to make a legal declaration to confirm that the award of this grant will comply with EU law on State Aid, which requires that they have not received any other state aid that exceeds in total €800,000, under the De Minimis Regulations EC 1407/2013.

9. Tax

9.1. As prescribed for in the guidance provided to Huntingdonshire District Council by the government, grant income received by a business is taxable therefore any grant paid under this scheme will be subject to tax.

9.2. Only businesses which make an overall profit once grant income is included will be subject to tax.

10. Managing the risk of fraud

10.1. Huntingdonshire District Council will not tolerate any acts of fraud in relation to its Additional Restrictions Grant Scheme. Any persons found to be submitting a fraudulent claim by, for example, falsifying records, will be reported to the police for criminal investigation and could face prosecution. Robust action will be taken to recover any monies paid in respect of the fraudulent claim.

10.2. The council will undertake comprehensive checks to ensure that grants are paid only in respect of genuine applications.

10.3. The council reserves the right to reclaim any grant that has been paid in error or as a result of a fraudulent claim.

Between June and September 2020 a Local Authority Discretionary Grant Fund (LADGF) was implemented to support businesses ineligible to apply for existing grant schemes launched in April 2020, which were linked to business rates, namely, the Retail, Hospitality and Leisure Grant (RHLGF) and the Small Business Grant Fund (SBGF).