£1.5bn Covid Additional Relief Fund fails to deliver

First announced in March 2021, the Covid Additional Relief Fund was designed to provide a share of £1.5bn to businesses that hadn’t received any other form of business rates related relief such as Expanded Retail Discount. Despite its announcement in March, the detail wasn’t published until December 2021 and then took many councils several months to design and implement their own schemes.

The last time I reported on this subject was back in the Autumn, at which point the delivery statistics hadn’t been updated since June and the ’emergency funds’ – designed to go to businesses in need – had only found its way to some 28% of recipients. I’ve been eagerly awaiting the latest statistics (ok, that’s a bit of stretch) and July, August and September have just been released.

My concern at the time was that whilst the government provided a framework, the decision of who received relief and the mechanics of its implementation was left to individual councils. We had already seen the inconsistencies of Expanded Retail Discount, so surely lessons would be learnt? Sadly not! 56% of councils required an application process, some of which were complex and effectively means tested, requiring supporting financial information to show that the business had been impacted by Covid. 44% of local authorities just shared out £587m among ratepayers.

As the relief is applied to the 2021/22 rate year, the scheme is now closed (maximum of six months after year end to apply) so assuming that there isn’t a vast backlog of claims somewhere, the final count shows only £1.197bn of the £1.5bn has been awarded. So that’s a shortfall of only £302m – that’s quite a substantial lifeline to struggling businesses that’s never found its way into the right hands.

If we look at the councils close to home, Bury, Rochdale, Tameside, Salford, Stockport, Wigan and Bolton distributed circa 100% of their allocation. At the opposite end of the scale Manchester managed only 66% and Trafford a miserly 56%. The headline figures are only part of the story. £3.7m of relief in Tameside was shared amongst only 292 recipients, the bulk of them in the factory/warehouse sectors giving an average award of over £12k. Compare this to Wigan where over 2,200 recipients received an average of circa £2,500. What happens to the unallocated money? I honestly don’t know but I can guarantee it’s not going where it was intended.

Has CARF been a success? Some ratepayers will think so on the basis they received large payments, but I suspect that the bulk will have received a credit to their account with no knowledge or understanding of what it actually relates to. The whole process has demonstrated how not to promptly deliver targeted relief. A reasonable idea, very badly executed.