Thousands of small businesses in Manchester face ‘collapse’ after the government provided just a third of the funding needed to keep them afloat, leaders have warned.
A ‘top-up’ fund worth an extra £5.4 million has been made available to help firms in the city previously unable to access much-need finances during the coronavirus pandemic.
This includes businesses in shared office spaces, market traders, charities and bed and breakfasts paying council tax instead of business rates.
But the funding has fallen far short of the £18 million that Manchester council had requested from the government to support the 30,000 businesses eligible for support.
Town hall leaders say the additional small business grant scheme will only be enough to help one in thirty of the businesses that could qualify.
Coun Carl Ollerhead, the council’s executive member for finance and human resources, said: "We are committed to supporting businesses as much as possible during the Covid-19 outbreak and we are continuing to work through the remainder of applications for grant funding as quickly as possible.
“Of course, we welcome the additional discretionary grants that will help us support businesses that were not eligible for support in the initial business grant schemes.
“However, Manchester has a large number of businesses that fit into this category - potentially up to 30,000 - and it will be hugely challenging to provide financial assistance to every one of them with the level of grant funding that has been awarded to the city.
“We believe this fund could help us support around 1,000 businesses, so this leaves us with some very difficult decisions to make about how we help as many as possible with the limited resource we have.”
Concerns have also been raised by the Liberal Democrats, who accused the government of ‘deliberately shifting responsibility’ by not funding councils to provide the necessary support.
Nearly 1,500 small and micro businesses will be excluded from any relief, with the most at-risk industries being digital, creative, health and bioscience, independent retail and hospitality.
A further 405 charities and 30 regular market traders also now face no financial support.
Coun John Leech, leader of the Liberal Democrat group on Manchester council, said: “The government is not prepared to support the tens of thousands of vital small and micro-businesses, charities and market traders across the country, so they are deliberately shifting responsibility onto local councils.
“Put simply: by not providing enough funding to local councils to cover these businesses properly, the government is knowingly kickstarting the collapse of tens of thousands of businesses, charities and the livelihoods of even more.
“It is a deeply cynical and unfair move from the government.”
Both the Ministry of Housing, Communities & Local Government and Department for Business, Energy & Industrial Strategy were approached for comment.
Grants will be provided up to a maximum of £5,000 per business, applications open until June 10. For more information, click here.
The council will initially consider applications from the following eligible businesses with fixed property-related costs of more than £1,500 a year.:
- Start up and micro businesses
- Companies in the digital, life sciences and creative sectors
- Businesses within the Oxford Road Corridor and the Airport Enterprise Zones
- Charities and co-operatives
Then they will consider applications from permanent food and market halls, independent retailers and other businesses.
