Council’s sitting on £33m of unpaid grants for local businesses

Five weeks after the council promised to get grants to businesses ‘within seven days’, more than half of the borough’s firms are still waiting to receive a penny, as MT WALLETTE reports

Priscilla’s Play Café in the Whitgift Centre has been left waiting for their emergency funding

Hundreds of traders in Croydon have been left waiting by the council for more than a month for vital grants that they were promised would be in their bank accounts “within seven days”.

“The stress is unbearable,” according to one business owner in Purley who has received none of the money they were promised, and who have now gone into a new month facing mounting bills without any income to meet them.

Most businesses across the country were ordered to close under the covid-19 lockdown which was imposed on March 23, but they were promised grants of £25,000 or £10,000 to help tide them over. The government handed the cash for the grants to local authorities, such as Croydon, to distribute to registered companies.

But the latest figures published by Whitehall today show that more than half of the £60million allocated to Croydon for emergency business grants has still to be distributed, five weeks after the Town Hall received the cash.

According to the official figures, Croydon has distributed £27,030,000 out of the £60,588,000 that they were given.

With 4,218 Croydon businesses registered as eligible for the grants, only 1,950 have received their cash from the council – that’s just 564 more than a week earlier when the Business department first published the figures, seen as an effort to shame the slow-performing local authorities into getting the money to the people who need it.

Then, the government gave councils a target of distributing all the money by the end of April. Croydon Council has fallen a long way short of achieving that and is among the worst boroughs in the whole of London for disbursing the public money.

Some increasingly anxious business owners, who have been in contact with Inside Croydon, report that their pleas for help to Croydon Council have been ignored.

“Our landlords are being wonderful and patient and not chasing money at the moment, but I still have lease equipment and energy and staffing bills to pay,” said one business owner who has been waiting for more than 35 days.

The owners of Allbikes in Purley say ‘the stress is unbearable’ as they wait for their grant

The intention of the government’s covid emergency funding was to help businesses keep their heads above water in the short-term, to be able to trade again once the lockdown is over.

Some business owners in Croydon fear that, denied their grant through the council’s slow administration, they could go bust.

“Cash flow is an issue while I wait for the furlough money to come later this week so I can pay our staff. I’ve had to use my own wages to pay some staff some money while I wait for either the grant or the furlough money to come.”

One business owner has told Inside Croydon that when, more than two weeks ago, they contacted the council to ask about the delays in payments, they were told that the payment had been made to them, but that the money must have “been lost in the ether”, and that the council would need to look into the matter.

“I was told to keep chasing,” they said.

Two weeks later, and still no payment has been received, the trader claiming that council officials have refused to put anything in writing to them.

“I’m sick of being fobbed off without answers and no one calling me back or replying to emails.” This trader’s grant application – which they were promised would be paid in seven days – was made on April 3.

Incompetent: Tony Newman and cabinet member Manju Shahul Hameed have failed to get £33m cash distributed to businesses

Today, the increasingly erratic council leader, Tony Newman, wrote to his fellow Labour councillors that “all of our efforts twenty four seven [sic] will remain on tackling this dreadful covid virus and doing everything we can to support the people of Croydon”.

That, though, is far removed from the experiences of many of the borough’s hard-working business people, who in some cases are seeing their lives’ work turn to dust because of Newman’s council’s incompetence. 

Sara and Nigel Aliano own Allbikes in Purley. They received a message from the council on March 31 advising them that their grant application had been successful and assuring them that the money would be in the company’s bank account within seven days.

One month later, and nothing…

“I didn’t chase it initially as I knew other Purley businesses were getting their money,” Sara Aliano said.

“I called them on April 20 and was advised there had been a problem with a batch of payments and to wait another seven days. I expressed my concern that if it wasn’t resolved by the end of the month it would become a really big problem for us. No reassurance was offered, no details taken.”

When Aliano called the council again at the end of last week, “I was advised it was a government issue and nothing to do with the council.”

The Alianos had wages to pay at the end of April, with no income to make their payments. Sara Aliano says that when she told the council official this, they “shouted down the phone at me that ‘the grant wasn’t for paying wages, that’s what furlough is for’.”

Thornton Heaths Patty Palace has been forced to re-open because the council has failed to pay over its covid grants

The emergency business grants are intended to allow businesses to juggle their finances at this difficult time, and use it to make payments as necessary, where they see fit. Allbike’s furlough payments are still being processed.

When Sara Aliano mentioned this to the council staffer, “He shouted that I wasn’t listening, and then hung up.”

The Alianos are members of Purley BID, one of the business improvement districts who have been assisting the council in working with traders around the borough, and they lodged a complaint with the council over the official’s handling of the matter.

Sara Aliano says that they got another phone call, from a more senior council official, soon after. “She promised me she would deal with it and make sure I get the payment, but I still don’t have confirmation of when that will be, and I still have to find the money to pay our wages.

“The stress is unbearable.”

In Thornton Heath, Carl Maxam, the owner of Patty Palace, has been forced to partially re-open his catering business despite the lockdown because the promised grant money has never arrived.

“Ignore all the council’s press releases about businesses not coming forward to claim the grants,” Maxam told Inside Croydon.

“Business owners like myself have done everything and not received a penny or even an update on why we haven’t been issued with the funds allocated for us. 

“I applied on March 30. I’ve been back and forth with the council, including Councillor Manju Shahul-Hameed who’ve made promises and has done nothing.”

When Maxam called the council at the end of last week, he was told that staff have been instructed not to give any further information on when payments will be made.

“This behaviour is totally unacceptable in this time of great uncertainty,” Maxam said.

“I’ve had to re-open my business risking my health to meet my payments, while the council has ignored our requests.”


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About insidecroydon

News, views and analysis about the people of Croydon, their lives and political times in the diverse and most-populated borough in London. Based in Croydon and edited by Steven Downes. To contact us, please email inside.croydon@btinternet.com
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