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Additional restrictions grant policy

Covid-19 Additional Restrictions Grant Policy (discretionary payment scheme), November 2020

1. Introduction

1.1. In response to the COVID-19 pandemic, in October 2020, the Government announced a further package of financial assistance to support businesses in their local area under Local Covid Alert Level Very High (LCAL3) or national restrictions.

1.2. On 31 October 2020 the Government announced the introduction of the Additional Restrictions Grant (ARG). This is a discretionary scheme which in part, has been introduced to support businesses that are not eligible for the Local Restrictions Support Grant (closed) (LRSG). The LRSG is only eligible to retail, hospitality and leisure businesses that are mandated to close and are within the business rates system. Both schemes are to be administered at a local authority level.

1.3. On 5 November 2020 England entered into a 28-day period of national restrictions. This period is currently understood to come to an end on 2 December 2020.

1.4. Between June and September 2020 a Local Authority Discretionary Grant Fund (LADGF) was implemented to support businesses ineligible to apply for existing grant schemes launched in April 2020, which were linked to business rates, namely, the Retail, Hospitality and Leisure Grant (RHLGF) and the Small Business Grant Fund (SBGF).

1.5. This new discretionary scheme allows Local Authorities increased discretion, with minimal national qualifying criteria being stipulated by the Government.

1.6. The Government has provided written guidance to Local Authorities on the requirements of the Discretionary Grants Scheme. Links to that guidance are included later in this policy.

2. Aim of this Policy

2.1. This policy sets out the approach that will be taken by Warwick District Council in relation to the Additional Restriction Grant Scheme. It aims to support qualifying local businesses that have been adversely impacted by the current national restrictions which were imposed on 5 November 2020.

2.2. The Policy seeks to provide clear guidance to potential applicants about the nature of the fund, the eligibility criteria, the types of businesses that this scheme is designed to assist and the level of grant funding that will be available.

2.3. This policy should be read in conjunction with the Government Guidance which has been issued to all Local Authorities in order to enable them to develop their local level scheme.

2.4. The Government Guidance document can be found at local restrictions support grants LRSG and additional restrictions grant ARG guidance for local authorities.

3. Administration of the Additional Restrictions Grant Scheme

3.1. Warwick District Council is responsible for administering the Additional Restrictions Grant Scheme to eligible businesses within its geographical boundary.

3.2. Under the Additional Restrictions Grant, the Government will allocate a one-off lump sum based on £20.00 per head of the population (ONS 2019 Mid-Year population estimates) in each eligible Local Authority when LCAL Very High or national restrictions are imposed. All Local Authorities in England are now eligible under the scheme due to the national restrictions coming into force on 5 November 2020.

3.3. The above mentioned sum is a one-off lump sum payment. As such, if a Local Authority exits LCAL Very High or National Restrictions and then re-enters at a later date, it will not receive an additional payment.

3.4. Local Authorities have the discretion to use funds for wider business support initiatives. As such, other initiatives or schemes will be implemented alongside this grant scheme at Warwick District Council’s discretion.

3.5. For Warwick District Council the total Discretionary Grant fund amounts to £2,875,060.

3.6. Warwick District Council will limit the total amount of awards granted under the discretionary Additional Restrictions Grant Scheme to the limit of funding that has been provided by Central Government.

3.7. Once the above limit has been reached through grant payments or other business support initiatives, there can be no further payments made to businesses under this Discretionary Grant Scheme, whether or not they meet the eligibility criteria set out in this policy document.

3.8. The funding for this scheme can used across financial years 20/21 and 21/22. Warwick District Council have until 31 March 2022 in which to spend this sum.

4. Businesses that will be supported under Additional Restrictions Grant Scheme

4.1. Additional Restrictions Grant (Part A) Businesses that have previously received grant payments under the Small Business Grant Fund (SBGF) or Local Authority Discretionary Grant Fund (LADGF).

4.2. Additional Restrictions Grant (Part B) Non-rated businesses that have been mandated to close but are NOT eligible for a grant under the Local Restrictions Support Grant (closed) scheme. Businesses (non-rated and rated) that are NOT mandated to close, but are adversely impacted by national restrictions and/or other factors associated with COVID-19.

5. Eligibility criteria for the Discretionary Additional Restrictions Grant Scheme

5.1 Ineligible businesses:

  • Businesses that are subject to strike off notice, insolvency or administration
  • A business with a trading address which is not within the local authority area of Warwick District. Not to be confused with a registered address, a trading address is the address detailed on a company’s invoice and the address to which customers, banks or suppliers correspond.

5.2. Eligible businesses:

  • Businesses that qualify as either a micro or a small business (as defined in the Small Business, Enterprise and Employment Act 2015 and the Companies Act 2006.)
  • To qualify as a small business, applicants must demonstrate at least two of the following criteria 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
  • Businesses are eligible, where one or more of the below statements apply:
    • Non-rated businesses that have been mandated to close, but are ineligible to apply for a grant under the Local Restrictions Support Grant (closed) scheme.
    • Businesses which have previously been awarded grants under the Small Business Grant Fund (SBGF) or Local Authority Discretionary Grant Fund (LADGF).
    • Businesses that are NOT mandated to close, but are adversely impacted by national restrictions and/or other factors associated with COVID-19.
  • Businesses that have applied for the Coronavirus Job Retention Scheme (the so called furlough scheme) are eligible to apply for a grant under this scheme.
  • Businesses that are eligible for the Self-Employed Income Support Scheme (SEISS) are eligible to apply for a grant under this scheme as well.
  • Businesses must have been trading on 4 November 2020 to be eligible to apply for a grant under the Additional Restrictions Grant Scheme.

5.3. The Council will need to see proof that any business making an application was trading on the 4 November 2020 and as such was NOT in administration, insolvent or where a striking off notice has been made.

5.4. Applicants to this scheme will be required to make a legal declaration that they meet the above eligibility criteria.

6. Amount of individual grants that businesses will receive

6.1. Warwick District Council have been awarded a total of £2,875,060 to support businesses during the current period of national restrictions which commenced on 5 November 2020. This sum is one–off allocation and, at this time, no further monies are expected from the Government to support businesses in circumstances where similar national restrictions are applied.

6.2. Warwick District Council has allocated £2.1m towards this grant payment scheme (ARG). It is reserving the balance that remains to assist the district’s local businesses with future support initiatives and projects in 2021.

6.3. Each recipient business to this grant payment scheme (ARG) will receive a one-off payment of £1,000.

7. Application Process

7.1. Applications for a grant under this Discretionary Grant Scheme will be accepted via an online form.

7.2. Following the launch of the scheme on Tuesday 17 November 2020, Warwick District Council will introduce a 14-day application window. This will strictly close at midnight on Monday 30 November 2020.

7.3. It is the intention of Warwick District Council to avoid undue burden and complexity on businesses in respect of the application process.

7.4. Whilst avoiding undue complexity, and burden on applicants, appropriate evidence will be necessary in support of an application to demonstrate the eligibility criteria outlined in this policy is met and to assist the Council in making an informed decision on the award of a grant.

7.5. The on-line application form will identify the evidence requirements in line with those set out above in section 5.

7.6. The decision of the Council in respect of the award of or refusal of a grant will be final. There will be no appeal process.

8. State Aid

8.1. The United Kingdom left the EU on 31 January 2020, nonetheless under the Withdrawal Agreement the State aid rules continue to apply during a transition period, subject to regulation by the EU Commission. Therefore, the Council must be satisfied that State aid requirements are met before grants can be paid out to individual applicants.

8.2. Under De Minimis rules an organisation is permitted to receive up to the equivalent of €200,000 of aid within a three-year period.

8.3. Where the threshold of 200,00 has been reached payments can still be made in line with the Covid-19 Temporary Framework for UK Authorities, which has been introduced to support businesses during the current COVID-19 outbreak. This temporary framework permits an organisation to receive up to the equivalent of €800,000.

8.4. Where an applicant is below but close to that threshold, the grant award will be set at such an amount as to ensure that the applicant does not exceed this threshold. 8.5 As part of the application process, all applicants will be asked to make a legal declaration to confirm that the award of this grant will comply with EU law on State Aid, which requires that they have not received any other state aid that exceeds in total €800,000, under the De Minimis Regulations EC 1407/2013.

9. Tax

9.1. As prescribed for in the guidance provided to Warwick District Council by the Government, grant income received by a business is taxable therefore any grant paid under the Local Authority Discretionary Grant Fund will be subject to tax.

9.2. Only businesses which make an overall profit once grant income is included will be subject to tax.

10. Managing the risk of fraud

10.1. Warwick District Council will not tolerate any acts of fraud in relation to its Additional Restrictions Grant Scheme. Any persons found to be submitting a fraudulent claim by, for example, falsifying records will be reported to the police for criminal investigation and could face prosecution. Robust action will be taken to recover any monies paid in respect of the fraudulent claim.

10.2. The Council will undertake comprehensive checks to ensure that grants are paid only in respect of genuine applications.

10.3. The Council reserves the right to reclaim any grant that has been paid in error or as a result of a fraudulent claim.

Addendum 1 to Covid-19 Additional Restrictions Grant Policy (discretionary payment scheme) 1 December 2020 - Part C

This addendum to Warwick District Council’s Additional Restrictions Grant Scheme (ARG) policy sets out a second strand (“Part C”) of financial support for leisure and hospitality businesses.

  1. On 2 December 2020, COVID-19 Tier 3 (LCAL 3) restrictions will apply to Warwickshire.
  2. Part C is a grant payment scheme which is eligible, exclusively, for rated leisure and hospitality businesses, that are mandated to close under COVID-19 LCAL 3 restrictions or those businesses that have been nationally mandated to close since 23 March 2020.
  3. An online application, for Part C of this scheme, will be available on Warwick District Council’s (WDC) website from the morning of Friday 4 December 2020. This application window will remain open until midnight Monday 20 December 2020.
  4. Part C will provide eligible rated businesses a one-off grant payment of £2,000.
  5. An integral element of Part C, will be that eligible rated businesses will, in addition, qualify for a grant under the LRSG (closed) or LRSG (sector). Correspondingly, Part C applications will be accepted per hereditament and will not be limited to one per business.
  6. The LRSG (closed) scheme provides eligible businesses a grant payment, in 14-day tranches, for the period that local restrictions apply, providing that this is not less than 14-days. The LRSG (sector) scheme provides eligible businesses with a payment, in 14-day tranches from 1 November 2020.
  7. Part C eligibility criteria:
    1. Businesses must be eligible for LRSG (closed) or LRSG (sector) grant payment schemes.
    2. Businesses must be Warwick District Council business rate payers.
  8. Some, but not all, exclusions to the LRSG (closed) scheme, will naturally apply to Part C. These are: -
    1. Businesses that are able to continue to trade because they do not depend on providing direct in-person services from premises.
    2. Businesses in areas outside the scope of the localised restrictions, as defined by Government.
    3. Businesses that have chosen to close but have not been mandated to do so.
  9. There are two exceptions, to the exclusions associated with the LRSG (closed), these are: -
    1. Businesses are not required to have been closed for a full 14-days from 2 December 2020. A principle of Part C, is to award one-off grant payments, irrespective to the term that LCAL 3 is applicable.
    2. Businesses that are subject to national mandated closures since 23 March 2020 and are in receipt of LRSG (sector) payments, are eligible under Part C.
  10. For the avoidance of doubt, businesses which have already received grant payments that equal the maximum levels of State Aid permitted under the de minimus rules and the COVID-19 Temporary State Aid Framework are not eligible under this scheme – see point 8 of the ARG policy.
  11. For the avoidance of doubt, businesses that are in administration, insolvent or where a striking-off notice has been made are not eligible under this scheme

Addendum 2 to Covid-19 Additional Restrictions Grant Policy (discretionary payment scheme) 11 January 2020 - Part D

This addendum to Warwick District Council’s Additional Restrictions Grant Scheme (ARG) policy sets out a further strand (“Part D”) of financial support for non-rated retail, hospitality and leisure businesses.

  1. On 5 January 2021, due to COVID-19, national lockdown restrictions were imposed across the UK.
  2. Part D is a grant payment scheme which is eligible, exclusively, for non-rated retail, hospitality and leisure businesses, that are mandated to close or are unable to trade due to national lockdown restrictions.
  3. An online application, for Part D of this scheme, will be available on Warwick District Council’s (“WDC”) website from the morning of Monday 11 January 2021. This application window will remain open until midnight Friday 29 January 2021. This date may be reviewed and extended.
  4. Part D will provide eligible rated businesses a one-off grant payment of £4,000. Only one grant payment will be awarded per eligible business.
  5. Part D eligibility criteria:
    1. Qualifying businesses will not hold a business rates account.
    2. Qualifying businesses will operate within the retail, hospitality and leisure sector and, as such, will be mandated to close or unable to trade.
  6. For the avoidance of doubt, the main principles from the overarching Additional Restriction Grant policy remain, these are:
    1. A business will not qualify if it has already received grant payments that equal the maximum levels of State Aid permitted under the de minimus rules and the COVID-19 Temporary State Aid Framework is not eligible under this scheme – see point 8 of the ARG policy.
    2. A business will not qualify if it is in administration, insolvent or where a striking-off notice has been made.
    3. A business will not qualify if its trading address is outside of the Warwick District Council boundary.
    4. A business will only qualify if it was trading on 4 November 2020.
    5. A business will only be eligible if it qualifies as a micro or a small business (as defined in the Small Business, Enterprise and Employment Act 2015 and the Companies Act 2006) – see point 5.2 of the ARG policy.