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Tuesday, July 23, 2024

Local business dismayed as council returns £1.2m in grants

A local Chiswick business owner has been left gobsmacked after he was refused Covid business rates relief

A local Chiswick business owner has been left gobsmacked after he was refused Covid business rates relief. Nick Jenkins runs a small language school with his wife serving those on foreign exchanges, people coming to work in the NHS and local au pairs.

During the Covid pandemic, he was forced to shut his doors for eight months severely affecting his business, which is still struggling to recover from the disruption years later. Like many Nick applied for business relief to soften the financial blow, a scheme that was funded by the government and distributed by local councils.

To his dismay his business, SpeakEasy, was deemed not to be in need of the money by the council, meaning he lost out on thousands of pounds of support. “When they first introduced the rate relief for leisure, retail and hospitality we didn’t come under that umbrella. We asked if we could go under that umbrella and the council refused.”

Nick Jenkins poses for photos in classroom Image: LDRS

“If we were in Ealing,  if we had literally gone halfway down the road, Ealing gave that award of the rates, of £40,000.” Nick says that due to the two boroughs’ differences in how they handed out grants and relief, businesses a stone’s throw away from his own were receiving significant support while he battled to receive a break from business rates charges which applied even when his doors were shut.

“Move on a year or two and the government says ok businesses still need help here’s some more money to the councils, we thought this is great because we didn’t fall under the first round we damn sure fall under the second one. You know, look at us we closed for eight months, we are struggling and when they said no we just couldn’t believe it.”

Nick’s disbelief turned to curiosity as he attempted to clarify Hounslow’s opaque system, leading him to put in a Freedom of Information (FOI) request into exactly how the council made decisions on who it awarded. “When we looked into how they did it, it was just unbelievable.”

The FOI revealed where the money had gone much to the shock and chagrin of the business owner. “Huge multinational businesses, mostly around Heathrow, BA, Singapore Airlines. Huge national corporations getting lots of money and we, a small business, struggling, who have had to close, are badly affected because of the business we are in: foreign students. We got nothing.”

Perhaps even more strange were some of the smaller places that did receive funding. On the list of places given relief was a private school which received over £4,000 in support, which Nick believes was for the maintenance of its boathouse. “To rub salt into the wound, as well as these multinational businesses were this boathouse, I mean you couldn’t make it up.

“A boathouse on the Thames run by a private school. I mean talk me through that?” Nick’s exasperation has turned to deep frustration after the near scandalous revelation that not only was the council refusing to help his struggling business while allocating resources to others but still had money left over.

As part of the FOI, it was revealed that the council was still in receipt of just under £1.2m in remaining grant money. When Nick asked what was going to happen with the money, the reply felt like a kick in the teeth.

Cllr Shantanu Rajawat Image: Hounslow Council

He told Local Democracy Reporting Services: “They have £1.2m left which they are going to give back to the government and they say ‘no we are still not interested in helping you’, I mean, what sort of organisation is that? That’s just awful.”

LDRS reached out to the council to grasp the rationale behind the decision to return the money to the government. Cllr Shantanu Rajawat who was in charge of allocating grants and is now Leader of Hounslow Council said: “Uncertainty about the demand led to the majority of councils returning a similar, or higher proportion, of the government funding.”

He also explained the reason why SpeakEasy was not included in the Covid relief funding, saying: “said: “We understand that many businesses were sadly negatively impacted by the pandemic. However, all councils had to set perimeters for those they could support with the government’s COVID 19 additional relief funding (CARF).

“We used modelling from Oxford Economics to identify businesses experiencing the most significant impacts from the pandemic and designed a scheme that balanced the likely demand for support, with the funding available.”

Nick says he appealed the decision not to support his business arguing that the categorisation system the council used was too inflexible and did not account for businesses like his, however to no avail. He says that the £14,000 he could have received under the scheme would have made a huge difference to his business that suffered the ‘double whammy’ of Covid and Brexit, with foreign students being his main source of income.

Although SpeakEasy did not receive this support Cllr Rajawat does point out that: “Although the SpeakEasy school did not qualify for our CARF scheme, we did support them with COVID grants totalling £20,655, between 2020 and 2022.”

Nick says that his business has not recovered from the pandemic with student numbers almost halving from pre-covid levels from around 120 to 70. “The money would still be really helpful. We are still not fully open after all the Covid and all the Brexit stuff.

“We still don’t open two nights a week and for a small business, £14,000 is a lot.”

“The rules [Hounslow Council] came up with were just ridiculous.” The £1.2m is set to be returned to the central government this month meaning there is no hope of Nick getting the support now.

Jack Emsley, Conservative Councillor for Chiswick Homefields, commented on the situation: “At a time when small businesses have needed more support than ever, it’s a scandal that Hounslow Council is sending over £1 million in unspent grants back to central government.
“The Government was clear that the Additional Relief Fund should be used to support local businesses adversely impacted by the pandemic, so the fact that the council has failed to spend all of the money provided in a borough hit hard by the pandemic and subsequent economic impact is quite unbelievable.
“This is a huge slap in the face to local businesses and residents, who will rightly want to know why Hounslow Labour is withholding large amounts of Government grants whilst simultaneously increasing our council tax burden by the maximum possible amount.”
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