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
Jo Negrini: CEO sought to blame firms for grant delays – after council told them they did not need to apply
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.
Broken promises: Tony Newman, the council leader, and his cabinet member for business, Manju Shahul Hameed
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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That is actually disgusting. Shameful
This money will be ring fenced so I assume that the problems having nothing to do with the overall budget/cash issues of the Council. However were I to be wrong then it would be a new low for the Council. Perhaps the Council might reassure those affected on this point?
The buck has to stop at the top, and it is time for the so called leader to go. These are serious times with businesses fighting for their survial -it is not time for incompetent jobsworths to be holding back valid payments. In the report jo Negrini stated that businesses had not filled in the form properly – if so maybe she should identify what constituted not correctly, and produce valid evidence to back up her claim. Then the report says they were carrying out due diligence, something our council seems to be very good at. I would imagine businesses that are trying to survive in the real world, have better things to do than more and more form filling. They just need help. At no point am I criticising council employees, like in many companies there will be good and bad ones. My gripe is the ineffective incompetent leadership who live in a make believe fantasy world where their salary and/or allowance will be paid come whatever.
To give you an example of Croydon’s bungling:
A friend of mine launched a new business, with high street (in the generic sense) premises, in Croydon two years ago.
He applied for the Small Business Grant Fund, and was rejected for not being the registered rate payer.
Despite having paid rates for two years.
Croydon had failed – over that time – to update their records from the premises’ previous tenant, and won’t recognise him as the actual ratepayer.
He’s engaged in furious correspondence with them currently but if Croydon sticks, it’s got Local Government and Social Care Ombudsman all over it in my opinion.
It also occurred to me that, if Croydon doesn’t know who its actual ratepayers are, it’s also unlikely to know who should be but isn’t paying either.
The two biggest disasters to hit Croydon Council’s finances in recent years is the Westfield development and the formation of Brick-by-Brick. We’re now seeing the tangible effects of both; one is a very substantial loss of investment development and the other, the fundamental mismanagement of investment development.
And what does Council Leader Tony Newman do? He promotes the person responsible for both of these projects to be interim and then permanent CEO of Croydon Council.
Why?
Don’t underestimate the substantial inadequacy in Newman’s decision making processes in reaching this decision. Newman has the survival instinct of a dog in a pond; he’ll grab anything. Are we now paying the price of his acutely narrow vision for Croydon and expansive vision for himself?