Local Authority Discretionary Grants Fund guidance

The government has made available additional funding for a Local Authority Discretionary Grants Fund.  

Overall funding available 

Nationally this funding equates to 5% of the total funds that have been allocated to the Small Business Grants and the Retail, Hospitality and Leisure Grants. For the Lancaster City Council district this represents £1.68m and at this point is a finite sum of money.  

Grant levels 

Lancaster City Council has decided at this stage to award grants at the level of £2,000 to all eligible applicants. After the close of applications on 30 June 2020 a decision will be made on any further funding to be awarded to those eligible applicants who have successfully applied. The further funding they receive will depend upon the number and type of businesses successfully applying and the level of funding remaining. The council may also decide to reserve some funds for a second round of grants to businesses that the council wishes to make a local priority under this discretionary scheme.  

As this is a finite sum of money, if the number of eligible applicants exceed the funds available then the council will close the application process and cease awarding grants at this point. It should be noted that the council does not currently anticipate that this will be an issue. 

Eligibility 

Key criteria 

The Government has declared that it is aiming these grants at four key business attributes and Lancaster City Council is requiring that successful applicants will fulfil all of these criteria:

  • Small and micro businesses, as defined in Section 33 Part 2 of the Small Business, Enterprise and Employment Act 2015 and the Companies Act 2006 
  • Businesses with ongoing fixed property-related costs  
  • Businesses which can demonstrate that 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 

Small and micro-businesses 

To be a small business, under the Companies Act 2006, a business must satisfy two or more of the following requirements in a year 

  • Turnover: not more than £10.2 million  
  • Balance sheet total: not more than 5.1 million  
  • Number of employees: a headcount of staff of less than 50  

To be a micro business, under the Companies Act 2006, a business must satisfy two or more of the following requirements 

  • Turnover: not more than £632,000  
  • Balance sheet total: not more than £316,000  
  • Number of employees: a headcount of staff of not more than 10 

Eligible types of business 

The government has asked local authorities to prioritise four key business types within this grant scheme.

Lancaster City Council has decided that at this stage only these business types will be eligible to apply. This is so that we can ensure that as many businesses as possible from within the district that fall into these categories can receive this funding. 

The business types that are prioritised are: 

  • 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 which 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

Lancaster has made some local decisions/interpretations on these business types namely :

  • Regular market traders with fixed building costs, such as rent, are deemed to be permanent market traders, rather than casuals. 
  • Traders who have permanent street pitches with rent will also count as permanent market traders 
  • Market traders are those who have a permanent pitch that they pay rent for (or similar fixed building-related costs) as opposed to those who ‘go to market’ with their products. 
  • Bed & Breakfasts do not include lettings where the property is let on a self-catering basis as opposed to establishments providing individual guest rooms and which serve breakfast.  
  • ‘Stallholders’ in larger non-market venues e.g. antiques centres should apply under the shared spaces route 
  • Fixed property-related costs are building costs or similar and are not plant, vehicles etc
  • Shared workspace applicants should not have been assessed for business rates
  • Shared workspace applicants who have their business based in their domestic property should also have a rented work area in a shared space outside their home

Other eligibility considerations 

  • Companies that are in administration, are insolvent or where a striking-off notice has been made are not eligible for funding under this scheme 
  • Only businesses which were trading on 11 March 2020 are eligible for this scheme 
  • Parish councils are not eligible for this scheme

Other government support – impact on eligibility 

Businesses, or business owners who are eligible for any of the government business support schemes listed below are ineligible for this scheme. Please check you eligibility before application to avoid the council reclaiming any grants mistakenly awarded. 

  • Small Business Grant Fund (check your eligibility here
  • Retail, Hospitality and Leisure Grant (check your eligibility here
  • The Fisheries Response Fund (check your eligibility here
  • Domestic Seafood Supply Scheme (DSSS) (check your eligibility here
  • The Zoos Support Fund (check your eligibility here
  • The Dairy Hardship Fund (check for further information here

Businesses who have applied for the Coronavirus Job Retention Scheme and the Self-Employment Income Support Scheme are eligible to apply for this scheme. Please note that if your business has furloughed staff, then it will still be eligible for the Discretionary Grant. 

Tax information 

These are grants and so do not have to be repaid. However they do count as taxable income should the business be in overall profit by the end of the financial year. 

State aid 

Payments of up to and including £10,000 can be provided under the De Minimis State Aid rules, meaning applicants can receive up to €200,000 (approx £178,600) of aid within a three year period. 

Potential applicants who are part of a wider organisation should ensure that they are not in danger of breaking State Aid rules before applying. 

Fraud 

The Council will not accept deliberate manipulation and fraud. Any business caught falsifying their records to gain additional grant money will face prosecution and any funding issued will be subject to claw back 

Paper applications 

Paper applications can be posted out to those who are not able to apply online. Please be aware that submitting an online application will ensure a faster grant payment for eligible businesses. 

If you would like a paper application please either email econdev@lancaster.gov.uk or phone Customer Services on 01524 582000 

Paper applications should be returned to: Business Support, Lancaster Town Hall, Dalton Square, Lancaster, LA1 1PJ 

Paper applications must be received by the business support team by 30 June 2020. An email or phone call acknowledgement can be requested. 

Grant deadline 

Lancaster City Council has decided that the deadline for this round of grants is 30 June 2020.