Local restrictions support from 5 June 2021
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 2 June 2021 the Scottish Government announced the following Local Authorities would remain in Protection Level 2 restrictions in response to rates of COVID-19:
- East Ayrshire
- North Ayrshire
- South Ayrshire
- East Dunbartonshire
- East Renfrewshire
- North Lanarkshire
- South Lanarkshire
This grant funding will be made available through powers conferred by Sections 126 and 127 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.
The document aims to inform a mutual understanding amongst local authority practitioners engaged in the administration of these grants. It includes specific information relating to the grants.
Given their responsibilities for managing public funds, it is for local authorities to ensure that procedures for administering the grants are suitably robust, including due diligence to mitigate fraud and for audit purposes.
Local authorities are expected to seek recovery of overpayments including pressing criminal charges where necessary, if fraudulent claims are found. Councils will not be held financially liable for overpayments 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.
How will the grants be provided?
Local Authorities will administer the grants and will be responsible for delivering the funding to eligible businesses. The Scottish Government will fund the Council to make this payment, and will make additional funding available to support businesses corresponding to the length of time that it is necessary to retain Protection Level 2 restrictions within the relevant local authority areas. Local authorities should align this additional grant process with the existing retained infrastructure for the Strategic Framework Business Fund, including where possible for businesses with multiple eligible premises within Protection Level 2 areas. Protection Level 2 restrictions referred to in paragraph 2 above apply from 5 June 2021. Local authorities are asked to process the first payments to businesses by 11 June 2021 (and weekly thereafter, as appropriate).
Eligibility for support through this fund is predicated on whether a business has previously been in receipt of financial support through the Strategic Framework Business Fund. As such the Council is not therefore required to set up a separate application process for this fund. A local authority may however apply discretion to award a grant to a newly established business which meets all other eligibility criteria and is impacted by Protection Level 2 restrictions.
Our preference is for payments to be made into Business Bank Accounts although payments into personal bank accounts are permissible where local authorities are able to verify that the account is used for business purposes.
The Council is expected to offer an appeals process for applicants.
Due diligence, monitoring and reporting requirements
The Scottish Government will require local authorities to supply agreed management information on, by sector and RV class: the number of eligible businesses; awards made and the number of and amounts of actual payments made.
The first management information, including number of businesses supported and value of awards made will be required by or before noon on 14 June 2021. A final reconciliation return will also be commissioned for delivery at a later date.
Businesses in the Soft Play sector* that the Regulations require to remain closed at Protection Level 2 but would be permitted to open in other parts of Scotland from 5 June 2021 are eligible for:
- a grant of £750 each week for properties with Rateable Value of £51,001 or over or
- a grant of £500 each week for properties with Rateable Value up to £51,000
Soft Play businesses must have separate 'pay to play' charges (for clarity, this grant is not available to businesses that have a courtesy soft play area for customers i.e. car showroom, restaurant, airport, dentists waiting area, or is free to use as part of a larger entity etc). If a 'pay to play' soft play is within a multiple use unit, and use is not separately defined in the valuation roll, the 'pay to play' soft play's Rateable Value will be determined on the percentage of floor space it occupies including a pro-rata percentage of any attached café/retail area.
Specified hospitality businesses that the Regulations require to modify its operations as a result of being in Protection Level 2 are eligible for:
- a grant of £525 each week for properties with Rateable Value of £51,001 or over or
- a grant of £350 each week for properties with Rateable Value up to £51,000
Hospitality premises include restaurants, including restaurants and dining rooms in hotels or members’ clubs; cafes; bars, including bars in hotels or members’ clubs; and public houses. They do not include accommodation premises where these features are not present. Members’ clubs may include social or sports clubs with a liquor licence. Wet pubs and those that serve food are both included.
Where a premises has mixed use, i.e. softplay centre with a café/restaurant, it is eligible for a single grant based on the main business activity for the premises.
Businesses in the wedding and events sectors, not previously eligible for Strategic Framework Business Fund but impacted by these restrictions, may be eligible for support and separate guidance will be issued in relation to this.
Retail, accommodation providers that are not impacted by hospitality regulations, and sectors closed by law elsewhere in Scotland at Level 0 or 1 are not eligible for this additional support.
Additional eligibility criteria
In addition to levels of grant award, this guidance also sets out the criteria which the Scottish Government considers appropriate for the purpose of determining eligibility for these grants. It should be read and applied in conjunction with my guidance letter of 9 November 2020 and 27 January 2021 on the Strategic Framework Business Fund. In the main, criteria for eligible sectors must replicate the updated eligibility criteria already in use for businesses in areas subject to Protection Level 2 restrictions, and as set out above.
It is for a local authority to determine if a business meets the description and further information can be requested, where necessary, to determine eligibility.
Subsidy control considerations
Applicants are required to declare all previous support received from UK or Scottish or Local Government support schemes to provide local authorities with the necessary information to ensure payments are made correctly and compliant with EC State Aid and subsidy control limits.
The EU State Aid rules no longer apply to subsidies granted in the UK following the end of the transition period, which ended on 31 December 2020. This does not impact the limited circumstances in which State Aid rules still apply under the Withdrawal Agreement, specifically Article 10 of the Northern Ireland Protocol. The United Kingdom remains bound by its international commitments, including subsidy obligations set out in the Trade and Cooperation Agreement (TCA) with the EU. BEIS Guidance for public authorities explaining the subsidies chapter of the TCA, World Trade Organisation rules on subsidies, and other international commitments is available.
The Council will need to ensure that any funding awarded after 31 December 2020 is compliant with the UK’s international commitments arising from membership of the World Trade Organisation or through the UK’s various Free Trade Agreements, including the UK-EU Trade and Cooperation Agreement. Further guidance on the application of these agreements is provided by the Department of Business, Enterprise, Innovation and Skills.