Coronavirus (COVID-19): local authority discretionary fund - information for local authorities

Information for local authorities about the local authority discretionary fund.

Information in this document is provided by the Scottish Government, in conjunction with the Convention of Scottish Local Authorities (CoSLA), to Scottish local authorities.

On 17 November 2020, the Scottish Government announced further support for businesses and self-employed people in Scotland impacted by restrictions introduced to control the spread of coronavirus (COVID-19) to operate alongside and complement the Strategic Framework Business Fund as set out in the First Minister’s Statement to Parliament. Included in this announcement was a commitment to establish a £30 million Discretionary Fund to enable local authorities to provide additional support for businesses in their area. Further announcements by the Cabinet Secretary for Finance on 7 February and the 9 February respectively increased the level of funding available to local authorities by a further £90 million taking the total allocation to £120 million.

Through this fund, the Scottish Government will provide a one-off grant to each local authority in Scotland for the purposes of providing support to businesses impacted by Coronavirus restrictions. Further detail on the allocations for individual councils and the broad parameters for distributing this funding are set out below. 

This grant funding will be made available through powers conferred by Section 126 of the Housing Grants, Construction and Regeneration Act 1996.

This document has no statutory basis, is offered without prejudice to relevant legislation and legal decisions, and does not constitute legal advice.  

This document was developed by the Scottish Government in conjunction with CoSLA.

The document sets out guidance to local authorities regarding the basis on which allocations from the Discretionary Fund are made to local authorities and sets out parameters which councils should take into account when distributing this funding. 

Given their responsibilities for managing public funds, it is up to local authorities to ensure that procedures for administering the grants are suitably robust, including due diligence to mitigate fraud and for audit purposes.  This should include giving due regard to the principles for effective fraud control and having appropriate control mechanisms in place. We will not hold councils financially liable for payments associated with fraud and error. The exception to this would be circumstances where a council is found to be materially not compliant with the relevant UK Government fraud control guidance.

Purpose of the funding

The purpose of this fund is to mitigate the short term financial challenges being experienced by businesses adversely impacted by restrictions and regulations introduced since October to control the spread of COVID-19. 

Unlike previous funds which have been targeted towards specific groups or sectors impacted by COVID-19, this fund seeks to empower local authorities to direct additional financial support to specific groups or sectors within the business community where they consider this to be necessary or justified based on the distinct characteristics of their local economies. This recognises the insight that councils have on the business community in their area and where funding would be most effectively deployed in supporting local economies. 

This non-statutory guidance seeks to support local authorities in making decisions on how they should distribute this funding while recognising that the variability within and across local economies will demand differing approaches. It does not specify sectors or business types for support but rather draws on the Scottish Government’s experience of developing financial support packages for businesses over recent months to identify gaps in support that local authorities may wish to address. 

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