Businesses yet to see a penny of £1.5m rate-relief fund

By Hull Daily Mail | Posted: 25 Aug 2017

NOT a single penny of a support fund for struggling Hull businesses has been paid out – despite the cash being available for five months.

Hundreds of businesses in Hull and East Yorkshire, including many who have yet to be told they qualify for help, have not received their share of a cash pot, worth almost £1.5m, which has been earmarked to aid those worst hit in the region by a hike in business rates.

Business rates,  a tax paid to local and central government based on their property’s value,  were re-evaluated earlier this year by an independent agency, with many business owners seeing their annual April bill soar as a result.

To support those worst affected by the changes, Chancellor Philip Hammond set up a £300m business rate relief fund, announced at the Budget in March, to allow councils to support badly hit high-street retailers and private business owners.

But the Mail can reveal shops and businesses in Hull and the East Riding have yet to receive a single penny of the money due to software issues – even though councils have known how much was available to them since April 21. 

Hull City Council has £528,000 to hand out over the next four years, with £308,000 earmarked to be spent in this financial year (2017-18).

East Riding Council  has £961,000 at its disposal – £561,000 of that total must be allocated before the end of March next year.

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Officials at Hull’s Guildhall pointed the finger at central government software problems, saying an awaited upgrade had prevented its finance team from sending out the cash to under- pressure businesses.

“We have received the funds, but we had to update our software,” said a spokeswoman for the council.

“That is due to happen before the end of the month, so that the software is fully on-board to be able to undertake the process.

“We haven’t received any applications from businesses as the council will actually identify businesses that can benefit from the scheme.”

In a separate relief scheme, “70 to 80” pubs in Hull, with a rateable value of under £100,000, have been awarded a one-off £1,000 grant to help them with business rate changes, said the city council spokeswoman.

East Riding Council said it was still in the process of identifying eligible businesses for its business rate relief fund, but confirmed officers had already alerted some businesses that they would qualify for help.

A spokesman said: “The council is actively contacting businesses that may benefit from this support and has invited applications from all businesses that believe they may be eligible.

“The process is in its early stages and so the council has only received a small number of applications so far.”

Liberal Democrat leader Vince Cable said the software delay was “completely unacceptable” and called on ministers to “get a grip” on the situation.

He said it “beggared belief” that the relief fund was not properly established by the Conservative administration before handing over responsibility to local councils.

“The hardest-hit businesses were promised rapid relief to cushion the blow, but five months on most have received nothing,” said the former business secretary.

“That is enough time to wreck many a small independent business, who face having to lay off staff or even go bust.

“This delay is completely unacceptable. The government risks crippling thousands of small businesses through its incompetence.”

But Whitehall sources are privately angered at the suggestion that technical problems have prevented councils from transferring the cash.

They claim that some councils managed to get round the software issues and were able to hand over the money regardless.

The Department for Communities and Local Government  said ministers had been attempting to hurry payments along ever since councils were informed about how much they would receive at the end of April.

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