Tuesday 17 November 2020 5:47 pm

City of London businesses have received average of £8 each from new Covid grants

Businesses in the City of London have received an average of just £8.09 from the government’s latest £1.3bn Covid grant programme.

Figures released by the Department for Business, Energy and Industrial Strategy (Beis) showed that businesses in the local authority received the smallest proportion of the grant money released in November, with its 24,020 businesses getting a total of £194,420.

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In comparison, each business in the boroughs of Lewisham and Barking and Dagenham received an average of £594.45 and £589.36 respectively.

The funding is a part of the The Additional Restrictions Grant that was released for the latest Covid lockdown.

Beis said the massive disparity was because the funding allocation was based on population for each borough.

While the City of London has more businesses than all but a handful of other local authorities, its population is just 9,721.

The City of Westminster also suffered heavily from the calculation, with its 51,795 businesses receiving £100.90 each – the second smallest amount.

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Conservative Cities of London and Westminster MP Nickie Aiken said the allocation of funds put businesses in her constituency “at a severe disadvantage” during the current Covid lockdown.

“I am again calling on ministers at Beis to review the allocation algorithm so that SMEs in my constituency can get the support they need,” she said.

Businesses who do not have to close due to the latest coronavirus restrictions but are still not able to operate at full capacity are eligible for the grants.

The funding has been given to individual local authorities for them to distribute to businesses.

Richard Burge, chief executive of the London Chamber of Commerce and Industry, said the allocation mechanism must be “revisited urgently”.

“Figures recently released by the mayor of London show that the loss of tourism revenue to central London is over five times greater than the already significant loss of commuter revenue,” he said.

“Small businesses in the City of London especially, but also other central London boroughs, have been hit by this loss of visitor and commuter footfall and are now seemingly being punished again via the government’s grant mechanism.”

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Business minister Nadhim Zahawi said the calculation used to distribute the funds ensured “a fairly equal distribution” and that “there is a strong positive correlation between business count and population”.

This is not the case for the City of London and City of Westminster.