Councils distribute less than half of Omicron’s hospitality grants

Hospitality businesses in England affected by Omicron have received less than half of the government’s promised £635million support package, according to new analysis.

The Treasury announced funding in December to provide a lifeline to businesses suffering from mass cancellations and dwindling footfall over the Christmas period when the Omicron variant of the coronavirus spread.

Local authorities have been tasked with providing one-time grants, worth up to £6,000, to businesses in the hospitality, leisure and accommodation sectors.

Yet just £305million of the money distributed to 309 English councils had been paid out less than three weeks before the final close of applications on March 18, according to Altus Group’s analysis of official government data.

According to the new figures, some 29 councils had not distributed a single penny of the grants allocated to struggling businesses.

Carlisle City Council and East Herts District Council had both paid local businesses less than £1 for every £10 of funding they received.

The analysis comes as corporate rates climbed on Friday April 1 as the government scaled back its pandemic financial support measures.

Businesses in the UK will face a £7.1bn rise in rates for the year.

VAT levels also returned to 20% in the hospitality sector on Friday after falling to 5% during the pandemic, in a move that could significantly increase prices for customers.

UKHospitality boss Kate Nicholls said it ‘could prove fatal’ for business owners.

However, some areas have benefited more than others, with seven councils paying out more grants than they received from the government before the program closed.

The London Borough of Barnet paid just under £2.5million at the end of February, almost 40% more than it was allocated.

The other six councils which overspent were Bradford City Metropolitan Borough Council, Leicester City Council, Warrington Borough Council, Bury Council, Burnley Borough Council and Barnsley Metropolitan Borough Council.

Robert Hayton, UK chairman of Altus Group, described the grant scheme as a “postcode lottery”.

He said: ‘These types of businesses have seen one of their most valuable trading periods wiped out and just haven’t gotten the support they needed fast enough.

“I just hope the councils rallied in the end.”

Councils had to make all grant payments to eligible businesses by March 31, after which grants would not be repaid by the Treasury.

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