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Additional Restrictions Grant (ARG) November 2020

Introduction

  1. On 31 October 2020, the Government announced the introduction of additional support for Local Authorities under national and Local Covid Alert Level 3 restrictions. See announcement - https://www.gov.uk/government/news/furlough-scheme-extended-and-further- economic-support-announced
  2. This support will take the form of a funding scheme in the Financial Year 2020-2021 and can be used across Financial Years 2020/21 and 2021/22. The scheme is called the Additional Restrictions Grant (ARG) and is administered by business rate billing authorities in England.
  3. The government has provided guidance to Local Authorities about the operation and delivery of the Additional Restrictions Grant scheme.
  4. Under the Additional Restrictions Grant, Local Authorities will receive a one- off lump sum payment amounting to £20 per head in each eligible Local Authority when widespread national restrictions are imposed. Local authorities can use this funding for business support activities. The government envisages this will primarily take the form of discretionary grants, but LAs can also use this funding for wider business support activities.
  5. National and local restrictions are legally binding restrictions imposed where the Secretary of State for Health and Social Care requires the closure of businesses under regulations made using powers in Part 2A of the Public Health (Control of Disease) Act 1984 in response to the threat posed by coronavirus and commonly as part of a wider set of measures.
  6. In line with the eligibility criteria set out by the government and in this guidance, grant funding will provided to Local Authorities under national and LCAL 3 restrictions. This funding will be a one-off lump sum payment when national or LCAL 3 restrictions have come into force from 14 October 2020, in line with the grant offer letter sent to Local Authorities (using a grant under section 31 of the Local Government Act 2003).

Eligible Businesses

  1. The government has provided funding in order to support those businesses that have been severely impacted by the restrictions. Local Authorities can determine how much funding to provide to businesses from the ARG funding provided, and exactly which businesses to target. There is government guidance to encourage the types of business that should receive support.
  2. Local Authorities are encouraged to develop discretionary grant schemes to help those businesses which – while not legally forced to close – are nonetheless severely impacted by the restrictions put in place to control the spread of Covid-19. This could include – for example – businesses which supply the retail, hospitality, and leisure sectors, or businesses in the events sector.
  3. Local Authorities may also choose to help businesses outside the business rates system, which are effectively forced to close – for example market traders.
  4. Finally, Local Authorities could use ARG funding to provide additional support to larger local businesses which are important to the local economy, on top of the funding provided to those businesses via the Local Restrictions Support Grant (Closed) scheme, with due reference to State Aid.
  5. In taking decisions on the appropriate level of grant, Local Authorities may want to take into account the level of fixed costs faced by the business in question, the number of employees, whether they are unable to trade online and the consequent scale of coronavirus losses.
  6. The grant amounts given to individual businesses will be subject to state aid limits.
  7. Reigate & Banstead Borough Council will receive government funding of

£2,974,960, in respect of the financial years 2020/21 and 2021/22.

  1. Details of the agreed criteria are contained in the following paragraphs.

Exclusions to Additional Restrictions Grant funding

  1. Businesses that have already received grant payments that equal the maximum levels of State aid permitted under the de minimis and the Covid-19 Temporary State Aid Framework.
  2. For the avoidance of doubt, businesses that are in administration, insolvent or where a striking-off notice has been made, are not eligible for funding under this scheme.
  3. Businesses that were not trading on the first full day of national restrictions, or LCAL 3 restrictions
  4. Businesses will need to notify their Local Authority if they no longer meet the eligibility criteria for additional grants (for example, if they become insolvent).

Local Eligibility Criteria and Payments

  1. Where a business has not been required to close, then Reigate & Banstead will consider the fixed costs of that business, including rent and business rates. Where the business does not pay rent or business rates, then Reigate & Banstead will consider other unavoidable business related fixed costs, and will be able to estimate the rateable value of the premises that the business is operating from. Fixed costs must be in the name of the business applying for a grant.
  2. Businesses that have been required to close under the local or national restrictions and are not liable to pay business rates.
  3. Priority will be given to those businesses that, whilst not being required to close, have been affected by the closure of other businesses, and in particular those in the supply chain to closed businesses. This would include businesses that supply the retail, hospitality and leisure sectors, or businesses in the events sector.
  4. Any business applying must be operating within the boundaries of Reigate & Banstead Borough Council.
  5. Reigate & Banstead will prioritise businesses and organisations that provide support to local communities within the Local Authority area, and where the restrictions have impacted on their income.
  6. Reigate & Banstead may also take into account the number of employees and the scale and risk of potential job losses, whether businesses have had to close operations and are unable to trade online, and the consequent scale of impact of COVID19 losses.
  7. Businesses will be required to demonstrate that they have been severely impacted by the national restrictions.
  8. Awards will be made to cover the relevant national or local restriction period, initially four weeks from 5 November 2020 to 2 December 2020, in line with grants paid under the Local Restrictions Grant Scheme.
  9. In line with the Local Restrictions Grant Scheme, there will be three levels of payment. These will be £1,334, £2,000 and £3,000
  10. The grant levels and eligibility criteria are presented below.

Category

Grant Amount

  • Businesses occupying a commercial property on the local authority ratings list, with a Rateable Value of

£15,000 or less

  • Where there is no Rateable Value, then businesses paying rent of £15,000 per annum (£1,250 per month) or less
  • If no Rateable Value or rent, then the local authority may estimate the rateable value or rent of the property where the business is based, or take into account other business related fixed costs in the name of the business, with a value of £15,000 or less per annum

£1,334 per 28-day qualifying restriction period

  • Businesses occupying a commercial property on the local authority ratings list, with a Rateable Value of over £15,000 and less than £51,000
  • Where there is no Rateable Value, then businesses paying rent of over £15,000 and less than £51,000 per annum
  • If no Rateable Value or rent, then the local authority may estimate the rateable value or rent of the property where the business is based, or take into account other business related fixed costs in the name of the business with a value of over £15,000 and less than £51,000 per annum

£2,000 per 28-day qualifying restriction period

  • Businesses occupying a commercial property on the local authority ratings list, with a Rateable Value of over £51,000 or above
    • Where there is no Rateable Value, then businesses paying rent of £51,000 or above per annum
  • If no Rateable Value or rent, then the local authority may estimate the rateable value or rent of the property where the business is based, or take into account other business related fixed costs in the name of the business with a value of over £51,000 per annum

£3,000 per 28-day qualifying restriction period

The Application Process

  1. The application form will be available online. This electronic form including the declaration must be fully completed with all the required evidence to be considered for a grant.
  2. This application process will allow the Council to undertake pre-payment checks to confirm eligibility and to allow the Council to determine how to use its discretion in relation to the appropriate level of grant.
  3. The Council will use its discretion in identifying the right business to receive this funding, based on the application process.
  4. The Council will email or write to the business, stating that by accepting the grant payment, they have confirmed they are eligible under the grant scheme, and that any payments accepted will be in compliance with State Aid requirements.
  5. As a condition of funding we will expect the business applying to sign a declaration stating that they are not committing any fraud and that they are fully complying with any state aid limits, as well as giving the Council permission to share data to check such compliance and that these guidelines are complied with.

Decision Making Process

  1. Applications will be determined by authorised Council officers, and decisions signed off by the Head of Revenues, Benefits & Fraud, or other designated Head of Service, in consultation with Executive Members where appropriate.
  2. All decisions will be communicated by email or in writing to businesses. Decisions will be made as soon as possible after applications are received, after the receipt of further information if required, and after pre-payment assurance checks have been carried out.
  3. There is no statutory right of appeal against a decision regarding discretionary business grants. Where a decision is disputed, this will be reconsidered in consultation with an Executive Member of Reigate & Banstead.

Payments of Grant and Tax

  1. All payments of grant will be made by a BACS transfer to the company or business’ nominated bank account. Bank accounts will be verified by the Council’s counter fraud team.
  1. These payments are Grants and not Loans, and therefore will not require repayment, unless paid in error or where fraudulent activity is detected.
  2. Grant income received by a business is taxable therefore funding paid under the Additional Assistance Grants scheme will be subject to tax.
  3. Only businesses which make an overall profit once grant income is included will be subject to tax.

Managing the risk of fraud

  1. The Council will not accept deliberate manipulation and fraud. Any business that dishonestly provides false or misleading information in communication with the Council, including verbal communication, will be committing a criminal offence contrary to the Fraud Act 2006 and will be subject to a criminal investigation and criminal proceedings may be taken against them.
  2. All information is subject to internal and external audit checks.

Sharing Information

  1. By applying for a discretionary grant all applicants give authority to the Council to share data for efficient system administration and to protect the Public Purse, subject to the Data Protection legislation. This will include sharing data with Surrey and other Local Authorities.
  2. The Council will be required to share data with Government Departments for monitoring and other reasons. By applying for a discretionary grant all applicants give authority for this.