Detailed guidance confirmed for the Local Authority Discretionary Fund

19 May 20

We are pleased to report that Government has now issued Guidance for the Local Authority Discretionary Fund following its announcement of this further support package on 1 May.  The scheme is aimed at small businesses who were not eligible for the Small Business Grant Fund or the Retail, Leisure and Hospitality Fund and so widens access to support for businesses who are struggling to survive due to the Coronavirus shutdown but are unable to access other grant funding.  We are therefore hopeful that this scheme will go some way to supporting the section of our community that has thus far fallen through the cracks of Government’s financial packages.  

Local authorities are encouraged to make payments as quickly as possible to support struggling businesses, it is anticipated that the first payments made under the scheme will be received by businesses by early June.

Local authorities will be responsible for delivering grants to eligible businesses:

  • Only businesses which were trading on 11 March 2020 are eligible for this scheme
  • Businesses have to be small or micro businesses with ongoing fixed costs
  • Grants will be for £25,000, £10,000, or any figure below £10,000 – it is expected that many of the grants will be less than £10,000
  • Each authority will receive 5% of the funding they received under the RHL grants. 
  • Businesses who have used the Job Retention Scheme are eligible 
  • Businesses who have received funding through RHL grant, Small Business Grant or Self Employment Income Support Scheme are ineligible
  • Grants are subject to tax

Local authorities have discretion to determine how they allocate the funding and which type of businesses they want to prioritise.  It will be for local authorities to tailor their approach to local circumstances, such as providing support for micro-businesses with fixed costs or support for businesses that are crucial for their local economies.  In taking decisions on the appropriate level of grant, local authorities are encouraged to take into account the level of fixed costs faced by the business in question, the number of employees, whether businesses have had to close completely and are unable to trade online and the consequent scale of impact of COVID-19 losses.

Local authorities are advised by Government to set out a clear criteria for determining the appropriate level of grant to give businesses clarity. They are encouraged to prioritise small businesses in shared offices or other flexible workspaces. Examples could include units in industrial parks, science parks and incubators which do not have their own business rates assessment; as well as charity properties in receipt of charitable business rates relief which would otherwise have been eligible for Small Business Rates Relief or Rural Rate Relief. 

Your local authority should set out the scope of their discretionary grant scheme on its website, providing clear guidance on which types of business are being prioritised, as well as the rationale for the level of grant to be provided (either £25,000, £10,000 or less than £10,000).  There will need to be some form of application process to confirm eligibility relative to the local scheme.

Whilst the discretion afforded to local authorities in operating this scheme will inevitably mean there is something of a postcode lottery we would encourage you, provided you meet the eligibility requirements, to apply to your local authority. 

For more information about all the financial support packages available to UK businesses and self-employed individuals, please take a look at the Coronavirus Hub on the RYA website. Club Commodores and Training Centre Principals are also encouraged to check out the RYA Coronavirus (COVID-19) FAQs for Affiliated Clubs, Classes and Recognised Training Centres for detailed support and guidance.

If your business requires any assistance with applying for business loans or grants then please contact the Legal team via email or call 023 8060 4223.