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Cornwall Council could risk losing £10m helping businesses hit by coronavirus

Cornwall Council could risk losing £10m helping businesses hit by coronavirus

Published by Sarah Yeoman at 4:00pm 25th July 2020.

Written by Richard Whitehouse, Local Democracy Reporter

Cornwall Council could gamble £10 million to help local businesses in the hope that the Government will provide more coronavirus grants funding.

The council was initially given money by the Government to pay out to businesses in grants to help them stay afloat during the lockdown.

However the first round of funding had strict criteria which meant that some businesses missed out.

As a result the Government provided discretionary grant funding which helped those companies which had not been eligible for the first funds.

Cornwall Council received around £13.5m for discretionary grants but said this would not be enough to help all the businesses which had come forward for support.

It said it would need at least £27m to cover all the grants and has been asking the Government to allow it to use funding which had previously been provided under the original grant scheme.

On Wednesday, the council’s Cabinet heard that council leader Julian German had raised the issue with secretary of state Robert Jenrick who he said would be looking into it with Chancellor Rishi Sunak.

However in a finance report to Cabinet it was stated that the council had agreed a cap of £10m to underwrite any additional payments made to businesses above the £13.5m which had been provided by the Government.

Conservative councillor David Harris raised concerns about the council agreeing the measure.

He said: “Is there an intention to pay out money above that promised us by HMG (Her Majesty’s Government) with the hope that HMG will pay it back? If so that is a huge risk.”

"In the discretionary grants scheme in order to pay all the businesses that were in the guidance would have meant you paid over £13.5m.

“Members were keen that they did not want to pay out to some people and not others.

“What we agreed was that was a pot of money in the original business grant that wasn’t paid out could be used. Even though the Government hasn’t given us the ability to do that in writing members want to take the risk to use the underspend to shore up those businesses in the discretionary scheme.”

Tracie Langley, the council’s finance chief

Ms Langley explained that she recommended to councillors that there should be a limit placed on the additional expenditure of £10m.

She said: “There is more in the underspend but if the Government doesn’t let us use that money the extra grants would have to be paid out by the council. All we have done is limit that amount of money.”

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