Top Up to Local Grants Funds Scheme - PKF Francis Clark
skip to Main Content
Merry Christmas! Our offices will be closed from 1pm on Christmas Eve, reopening on Tuesday 4 January.

Top Up to Local Grants Funds Scheme

At the end of last week (22 May) we began to see details emerge for individual local authorities with their criteria for the distribution of the ‘top up’ or as it now known, ‘Local Authority Discretionary Fund’.  For local authority areas where we have an office, I have summarised the position in a separate blog with links to further information (if applicable). 

Below I have summarised the background to the scheme – with extracts from extracts from the guidance issued to local authorities which can be found via link.

 One important update to the original guidance issued on 13 May has been the removal of the Self-Employed Income Support Scheme from the list of cash grants the receipt of which would make you ineligible for the Local Authority Discretionary Fund.

Level of grants

Local authorities may disburse grants to the value of £25,000, £10,000 or any amount under £10,000. The value of the payment to be made to a business is at the discretion of the local authority.

Who are the grants aimed at?

The grants are predominately aimed at:

  • Small and micro businesses
  • Businesses with relatively high ongoing fixed property-related costs
  • Businesses that can demonstrate they have suffered a significant fall in income due to the COVID-19 crisis
  • Businesses which occupy property, or part of a property, with a rateable value or annual rent or annual mortgage payments below £51,000.

Definitions of small and micro businesses will be those that satisfy two to three criteria below:

Small Micro
Turnover, not more than £10.2m £632k
Balance sheet total, not more than £5.1m £316k
Number of employees, not more than 50 10

Further eligibility criteria outlined include:

  • Businesses which have received cash grants from any central government COVID-19 related scheme are ineligible for funding from the Discretionary Grants Fund. Such grant schemes include but are not limited to:
    • Small Business Grant
    • Retail, Hospitality and Leisure Grant
    • The Fisheries Response Fund
    • Domestic Seafood Supply Scheme (DSSS).
    • The Zoo Support Fund
    • The Dairy Hardship Fund
  • Businesses who have applied for the Coronavirus Job Retention Scheme are eligible to apply for this scheme
  • Only businesses which were trading on 11 March 2020 are eligible
  • Companies that are in administration, are insolvent or where a striking-off notice has been made are not eligible

National criteria and priority cases

BEIS have set some national criteria for the funds but are allowing local authorities to determine which cases to support within those criteria. They are asking local authorities to prioritise the following:

  • Small businesses in shared offices or other flexible workspaces. Examples could include units in industrial parks, science parks and incubators which do not have their own business rates assessment
  • Regular market traders with fixed building costs, such as rent, who do not have their own business rates assessment
  • Bed & Breakfasts that pay Council Tax instead of business rates
  • Charity properties in receipt of charitable business rates relief which would otherwise have been eligible for Small Business Rates Relief or Rural Rate Relief

Local authorities to set out the scope of their discretionary grant scheme

As stated in the guidance:

  • Local authorities should set out the scope of their discretionary grant scheme on their website, providing clear guidance on which types of business are being prioritised, as well as the rationale for the level of grant to be provided (either £25,000, £10,000 or less than £10,000).
  • Local authorities may wish to consider collaborating as they design their discretionary schemes to ensure there is consistency where they are working across a functional economic area (e.g. a Mayoral Combined Authority or Local Enterprise Partnership area) and may want to engage with MCAs and LEPs to ensure alignment and reduce duplication with other local discretionary business grants that may have been established.

As a reminder if you are unsure which local authority you are in you can use this search tool.

State Aid

The guidance sets out the state aid status of the payments and if payments made under the Temporary Framework as opposed to de minimis the “requirement for recipients to declare they were not an undertaking in difficulty on 31 December 2019.”


As an aside when the funding was announced on 2 May the sum being talked about, £617m, was referred to as:

  • Additional 5% uplift to the £12.33 billion funding previously announced for the SBGF and the RHLGF
  • BEIS to “confirm the exact amount for each local authority next week”

Based on my reading of the guidance issued yesterday whilst the £617m remains – it may not be an additional sum allocated to local authorities. For example in cases where local authorities that, having taken all reasonable steps to provide existing grants to eligible businesses, still have unspent initial grants funds allocation, they will fund the discretionary grants from this.

Please see our blog on Are you one of the businesses yet to claim your (rates) grant for details of unclaimed grants.

How can we help?

As always, we are here to help, visit our website hub for information on all issues surrounding the current crisis. Please do not hesitate to contact us if you have any questions.

FEATURING: Richard Wadman
Richard qualified as a Chartered Accountant with KPMG in 1993. Since 2006 he has worked in Corporate Finance, firstly with the predecessor firm in Truro… read more
Back To Top