Struggling firms say Covid grants are a 'shocking postcode lottery'

They said councils’ differing interpretations of government guidelines meant businesses’ survival was being determined by “a postcode lottery”.

Christine Boar runs catering business Deelishus from her home in Alexandra Park Road, Haringey.

Usually catering for large events like weddings, her business was down by about 80 per cent over the last year. She has just two bookings between now and Christmas.

“I think people are still being cautious,” she said.

As a home-based business, Deelishus was ineligible for government assistance besides furlough for she and her five employees.

“There seemed to be a complete lack of understanding about how small businesses work,” she said.

“It was all aimed at companies that pay rents and business rates – but I still have overheads. I still have to have a refrigerated van and all the associated costs like tax, insurance, MOT. I still have to have accountancy, payroll, storage.”

The solution appeared to emerge last November in the form of Additional Restriction Grants (ARGs).

What are they?

“Local councils have the freedom to determine the eligibility criteria,” said government’s guidance on ARGs.

It added that they should help businesses "severely impacted by the restrictions”, including those “that have not received wider grant support” and “do not pay business rates”.

Christine applied but, last month, was rejected.

“Unfortunately, as you operate your business from a residential property, you do not fit the criteria,” the council wrote.

Christine Boar, from Haringey, said her catering firm Deelishus had lost 80 per cent of its business due to Covid-19, but she had been refused grant funding by the council. (Image: Christine Boar)

She was baffled. Home-based businesses seemed to have perfectly fit the government criteria.

Through social media, she and other excluded Haringey businesses have since found home-based companies from 200 council jurisdictions who have received ARG funding.

Postcode lottery

“It’s shocking how disparate council responses are,” said Christine. “The rules are being interpreted in numerous different ways.

“Some councils have been fantastic. But with others, people are desperately trying to keep their businesses going and they’re not getting the support.

“How do the people making these decisions expect us to keep going? Businesses are just going to fold.”

Using Freedom of Information laws, the Ham&High found that as of March 8, government had given Haringey £7,759,345 to dish out in ARGs.

The council told the Ham&High it had now given out more than £5m.

But it added: “With regards to home-based businesses, restrictions on how the funding could be used have made it difficult to include these, but once all applications under the current approved scheme have been paid, we will then consider whether we can make a grant payment to these businesses if there is any remaining funding.”

No access

Neighbouring Camden Council had received £7,799,262 for ARGs by March 8, but had distributed just £30,670 – or 0.5pc.

Julian Stone, who runs the American Dry Cleaning Company, said he had already made roughly 25 per cent of his staff redundant and was struggling to access grant funding from Camden Council. (Image: Julian Stone)

Julian Stone runs more than 40 shops under his American Dry Cleaning brand.

Four are in Hampstead and Highgate, under Camden Council’s jurisdiction. The first, in South End Road near Hampstead Heath, opened in 1996.

“We are at about ten per cent of our usual business,” he said. “We are dependent on people going to the office, people attending social events and international travel – we get a lot of business from the hotels.”

He has already been forced to make around a quarter of his staff redundant, although he is confident the business will survive.

Dry-cleaners were not ordered to close during lockdown, making them ineligible for help – until ARGs were announced.

In Kensington and Chelsea, where Julian has other shops, he applied for ARGs and got them.

But he said: “The ARGs are still not open from Camden, whereas all the other councils had their ARGs open since December and have since closed.”

Fellow dry-cleaner Ian Cohen runs the Look New store in West End Lane, West Hampstead.

“There have been no ARG grants at all in Camden,” he said. “They opened applications for about two weeks late last year. I applied and called them up. They said they had received it but they were busy. That was about four months ago. I never heard back.”

But, like Julian, he has applied in other boroughs and already received the funds.

Ian Cohen said he had applied for Additional Restrictions Grants in other boroughs and received them, but his attempt in Camden had so far been unsuccessful. (Image: Ian Cohen)

Camden said it was one of the first councils to open ARG applications in December 2020 and its next round would open on April 15.

It said it had now distributed more than £1m in ARGs.

“While further funding for this scheme is expected in the summer, we know that many businesses have been impacted by the restrictions, which is why we must carefully consider every application that we receive and ensure that the funding is going where it is needed most,” a spokesperson said.