ECONOMIC hardship and the emotional strain caused by the Covid-19 crisis pose “a very real danger” to the survival of York’s smallest businesses.

The warning came as City of York Council confirmed it would receive around £2.2m from the Government's new £617million fund.

The fund aims to help small and micro businesses that do not qualify for the existing coronavirus grants or the self-employed income support.

The council said staff would work to ensure the grants are received as rapidly as possible once details are confirmed.

The discretionary fund aims to help small businesses:

  • in shared offices or other flexible work spaces;
  • market traders, science parks and incubators which do not have their own business rates assessment;
  • B&Bs which pay council tax instead of business rates;
  • and charity properties in receipt of charitable business rates relief which would otherwise have been eligible for Small Business Rates Relief or Rural Rate Relief.

The figure represents the five per cent ‘uplift’ promised to councils on the amount received through the coronavirus grants for small businesses and those in the retail, hospitality and leisure sectors.

Carolyn Frank, development manager, North Yorkshire Federation of Small Businesses, said the funding would be a lifeline to businesses on borrowed time.

“Businesses are running out of cash to pay their bills – with no income coming in.

"This is causing not only economic hardship to them but also taking a toll on their mental health, and there is a very real danger that we will lose some of the smallest businesses who are vital to York’s economy."

The extra funding is aimed at businesses with under 50 employees and ongoing fixed property-related costs whose income has been hit by Coronavirus restriction measures.

A Government spokesman said: “We are asking local authorities to prioritise businesses in shared spaces, regular market traders, small charity properties that would meet the criteria for Small Business Rates Relief, and bed and breakfasts that pay council tax rather than business rates. But local authorities may choose to make payments to other businesses based on local economic need. The allocation of funding will be at the discretion of local authorities.”

There will be three levels of grant payments. The maximum will be £25,000, along with grants of £10,000. Local authorities will have discretion to make payments of any amount under £10,000.

Carolyn added: “Councils should use the discretion they’ve been given to help as many of those facing hardship as possible. Locally we are hearing daily from businesses close to closing forever.”

She said some businesses would still miss out, but the fund had “provided a lifeline to many”. “It is now critical that help reaches businesses, from cash in their bank accounts to getting clear guidance and advice, in order to keep the economy heading towards recovery and not shutting down.”

Councillor Andrew Waller, executive member for the economy and strategic planning, said: "These are extremely challenging times for the people who run York’s businesses. From day one it’s been our priority to get relief into business’ bank accounts as securely and quickly as possible, with over £105m distributed in a matter of weeks, nearly 90 per cent of previous grant announcements.

“We’ll do the same with these grants, and are working with neighbouring councils to make sure that, as resources allow, there is as much consistency as possible.

“We hope that the Government will provide regulations to councils quickly so that we can announce details of how to apply early next week.”

Because the scale of the financial award to local authorities has been fixed, but the number of qualifying businesses and charity properties will emerge and vary, the council cannot immediately say how much each grant will be worth.

Full details are expected to be announced by the Government later this week. Grants will be distributed by an application process.

York and North Yorkshire Chamber of Commerce president Andrew Digwood said: “There are undoubtedly a number of smaller businesses whom for one reason or another have not been able to access the support and funds made available so far.

"Many of those in our region are in the supply chain to the hospitality and tourism industry. Although the details are not yet clear, this funding could be a lifeline for some of those businesses, but just as with other mechanisms that we’ve seen so far, the key will be how easy it is to access and how quickly the funds can get to the businesses that need them.”