Our Town Hall reporter, KEN LEE, on the continuing delays in emergency grant distribution in Croydon which have seen some firms go out of business during the coronavirus lockdown
Croydon has been the worst local authority in London for distributing what was supposed to be urgent covid-19 emergency funding to businesses, official figures show.
As shops, pubs and other businesses are reopening after lockdown, nearly 400 firms in Croydon who qualify for the grants have yet to get a penny from Croydon, even though the council received the money from government at the end of March.
These businesses were told by the council that they did not need to apply to receive the money, and on March 30 a cabinet member promised to pay over the grants “within seven days”.
Yet the latest accounts show that Croydon is still sitting on nearly £13million of government cash that was intended for small and medium-sized businesses in the borough.
These figures, have been released by the Department for Business, Energy and Industrial Strategy. As of July 12, nationally a total of £10.7billion has been paid out to more than 872,500 business properties.
On March 30, Croydon received one of the biggest grants in London: £60,588,000. This was intended for 3,933 registered businesses.
The government had set a deadline of the end of April for councils to distribute all the money. By this week, Croydon had distributed only £47,840,000 of its grant allocation, to 3,539 businesses.
The money was supposed to be distributed by local authorities under the Small Business Grants Fund (SBGF) scheme and the Retail, Hospitality and Leisure Business Grants Fund (RHLGF). Each grant is worth £10,000 or £25,000, depending on the nature of the business recipient, and was intended to help tide firms over the inevitable cashflow problems caused by the coronavirus lockdown.
Back on March 30, Croydon Council issued a press release (it’s still on the council website), stating that all businesses in the borough should have been contacted about the grant schemes. “Croydon businesses do not need to apply for this funding,” the council said at the time, adding their own emphasis to “do not”.
“All businesses that qualify for the grant will have been contacted by the council today and asked to fill in and return a simple online form to verify details such as the name of the rate-payer, their business address, VAT registration details and Companies House registration number,” the council said then.
Manju Shahul-Hameed was quoted in the press release promising businesses that they would all receive their grant payments, made via a BACS transfer into their bank accounts within seven days.
That council promise was broken long ago.
When the April 30 deadline for distributing the money came and went, Croydon had managed to disburse less than half of its allocated grants (£27million). This week’s figures show that over the last two months, the council has paid out just £20million of the remaining balance of £33million.
Croydon traders left waiting for their covid grants said that, “The stress is unbearable.”
As some businesses struggled not to go under, Jo “We’re Not Stupid” Negrini, the council’s £220,000 per year chief executive, started out blaming the borough’s businesses for failing to fill in the forms properly.
Negrini then told a council meeting the delays in making the pay-outs were because her council was conducting some kind of due diligence process that no other local authority had deemed necessary for the process.
Yet Negrini’s excuses do not tally with the accounts given by numerous Croydon businesses that have suffered unreasonable delays in receiving their grants. They tell of initial contact with council staff who have confirmed that their application has been in order, and that the money is on its way. Only for that to be followed by no payments and stubborn silence from Fisher’s Folly.
Measured against other London local authorities, Croydon’s performance in this respect has been abysmal.
Six other London boroughs – Westminster, the City of London, Camden, Islington, Ealing and Kensington and Chelsea – have actually distributed more in grant aid to businesses than they have received from central government.
Nearby Merton has managed to distribute grant aid to all but nine businesses in its borough. In Sutton, they have £3million still to distribute among 59 registered businesses.
On Monday, the council began the process of handing out redundancy notices to hundreds of staff who have worked tirelessly through the pandemic emergency.
Negrini, who as chief exec receives more in a month than some council staff are paid in a year, remains in post.
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