- 16 Apr 2021
On 16th March 2021, linked to the further development of Scotland’s Strategic Framework, the Scottish Government announced plans to modify its approach to providing COVID-19 related financial support to businesses, as follows:
- the Strategic Framework Business Fund would end, with a final four-weekly payment on 22nd March 2021 and a two-week transition payment on 19th April 2021 (the Strategic Framework Business Fund Transition Payment); and
- concurrent payment of a one-off restart grant on 19th April 2021(COVID-19 Business Restart Grant).
This combined 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 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.
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.
Ratepayers are eligible for these grants regardless of any arrears. However, local authorities have some discretion to withhold grant awards in very exceptional circumstances, where the business has significant outstanding arrears, which have been subject to a court decision.
How the grants will be provided
Local authorities will administer the grants and will be responsible for delivering the funding to eligible businesses. The Scottish Government will fund local authorities to make these payments, providing information on funding levels separately.
These grants do not require an application as payments must only be made to businesses eligible for the final four-weekly payment of the Strategic Framework Business Fund, or the associated Island Equivalent Fund, on 22nd March 2021. Applications forms for the these grants have been available on individual council websites and could be filled in online and submitted through the council’s website (if available) or returned to councils by e-mail. These funds have now closed to new applications, effective from 22nd March 2021, and the deadline for submitting related appeals for Strategic Framework Business Fund eligibility is 6th April 2021.
Local authorities are not therefore expected to offer an additional appeals process in respect of the Strategic Framework Business Fund Transition Payment and the COVID-19 Business Restart Grant.
Payments will be made into the business bank account of the business where possible, and personal accounts where a business bank account is not held by the business.
Due diligence, monitoring and reporting requirements
The Scottish Government will require local authorities to supply agreed management information aligned to the collection of data for other COVID-19 Business Support grant award schemes that they administer. We will engage with local authorities regarding to determine a specific deadline for submitting management information in relation to this scheme as well as the precise nature of the data requested. It is anticipated, however, that councils will be asked to provide information on the number of grants awards made and the number and total value of payments made, by sector and by rateable value. A final reconciliation return will then be commissioned for delivery in June 2021.
Eligibility and level of grant award
This final one-off and combined payment to businesses (largely in the hospitality, retail and leisure sectors) is due on 19th April 2021 and only payable to businesses/premises eligible for, or in receipt of financial support, through the Strategic Framework Business Fund (or COVID-19 Island Equivalent Payment) on 22nd March 2021. All other businesses and premises are excluded. Where a business has initiated administration proceedings, has declared insolvency or been issued with a striking-off notice, they become ineligible for the supplement payment and Business Restart Grant. We ask local authorities to exclude these businesses from those grants where this becomes known to them. Additionally, where local authorities become aware of a business’ intention to vacate a premise that they operate in their area they are asked not to pay a Supplement and Restart Grant to that premise.
These grant awards are comprised of two separate elements, namely:
- Strategic Framework Business Fund Transition Payment – A pro-rata payment equivalent to two weeks of a Strategic Framework Business Fund Closure Grant or an Island Equivalent payment award as determined by Rateable Value. Properties with a Rateable Value up to £51,000 will therefore be eligible for a £1,000 supplement and those with a Rateable Value of £51,001 or over will be eligible for a supplement of £1,500; and
- Covid-19 Business Restart Grant - In addition to the Transition Payment, businesses/premises will also receive a one-off payment specifically to support them with the costs of re-stocking and re-opening or other restart impacts. The level of award that businesses are eligible for is contingent on both the Rateable Value of their premises and the sector in which they operate with businesses in the retail sector eligible for a payment of up to £6,000, and all others eligible for a grants of up to £18,000.
Further detail on the aggregated level of financial support that businesses in receipt of financial support through the SFBF are eligible for is set out below.
Non-essential retail businesses in receipt of support through the SFBF (see Annex B for additional detail) are eligible for:
- a one off grant of £7,000 for properties with Rateable Value below £51,000 (£1,000 SFBF Transition + £6,000 Restart Grant); or
- a one off grant of £7,500 for properties with Rateable Value above £51,000 (£1,500 SFBF Transition + £6,000 Restart Grant).
All other businesses in receipt of support through the SFBF are eligible for:
- a one-off combined grant of £9,000 for properties with Rateable Value below £15,000 (£1,000 SFBF Transition + £8,000 Restart Grant);
- a one-off combined grant of £13,000 for properties with Rateable Value between £15,000 and £51,000 (£1,000 SFBF Transition + £12,000 Restart Grant); or
- a one-off grant of £19,500 for properties with a Rateable Value above £51,001 (£1,500 SFBF Transition + £18,000 Restart Grant).
Where a business operates multiple premises, it is eligible for a grant for each one, consistent with eligibility for Strategic Framework Business Fund.
Additional detail on eligibility
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 letters of 9th November 2020 and 27th January 2021 on the Strategic Framework Business Fund and the associated Island Equivalent Payment. In particular, the criteria for the eligible sectors must replicate the updated eligibility criteria already in use for these businesses at Level 4. Any business not specifically mentioned in regulations is not eligible. It is for a local authority to determine if a business meets the description and further information can be requested, where necessary, to determine SFBF eligibility. The core requirement is therefore that a business must have applied for and been entitled to a Level 4 award from the Strategic Framework Business Fund or Island Equivalent Payment on 22nd March 2021. The one exception to this position is set out at point 22 below.
The table below provides a list of the sectoral classifications for individual businesses. Where a business provides multiple services or activities from a single premise that span the categories set out below, local authorities should determine the level of Restart Grant in accordance with the primary use of the premises (and follow the classification applied for earlier SFBF and related payments - retail premises cannot be reclassified).
Table 1 - Indicative List of eligible businesses by sector
Specific Premises Type
Cafes and coffee shops
Bed & Breakfasts/ Guesthouses
Caravan and Camping sites
Soft play centres
Indoor Bowling Centres
Nightclubs (including S.E.Vs)
Licensed Bingo Clubs
Outdoor Activity Centres
Visitor Attractions including visitor centres
Museums and galleries
Dance, Exercise/Yoga Studios
Indoor football centres
Skating rinks and swimming pools
Baby equipment shops
Electrical Goods Shops, including Repair Shops
Garden Centres and Plant Nurseries
Key Cutting Shops
Shoe Repair Shops
Hairdressers, beauticians, nail bars and other premises which provide other close contact services
Independent clinics and hospitals registered with Healthcare Improvement Scotland excluding those that provide medical or surgical assistance
Mobility Support Shops
Small Accommodation Providers Paying Council Tax Fund
In addition to those businesses in receipt of financial support through the Strategic Framework Business Fund and the Island Equivalent Payment, we are also extending the Restart Grants to those businesses that received a grant through waves 1 – 3 of the Small Accommodation Providers Paying Council Fund which was administered by local authorities in March. Local Authorities are asked to make a one-off grant of £9,000 (£1,000 SFBF Supplement + £8,000 Business Restart Grant) to all premises that received a grant award through any of the three waves of the Small Accommodation Providers Paying Council Tax Fund.
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 can be found here.
A stand-alone scheme will be created under the UKG’s new subsidy control regime to allow Restart Grant payments to be made in compliance with the EU-UK Trade & Cooperation Agreement (TCA). These payments are made separately from previous funding awarded under the EU Temporary Framework. The Scottish Government will work with local authorities to collate and publish a list of all businesses that receive funding in excess of £500,000 as a result of the funding made available through this scheme.
Non-essential retail – grants up to £7,500 based on rateable value:
For the purposes of this scheme, a non-essential retail business can be defined as a business that is used mainly or wholly for the purposes of retail sale or hire of goods or services by the public, where the primary purpose of products or services provided are not necessary to the health and well-being of the public.
Local Authorities may use the following criteria to assess whether a business is eligible for a grant under this threshold/sector (which must however be consistent with the classification applied for earlier SFBF and related payments):
- Businesses offering in-person non-essential retail to the general public;
- Businesses that were likely to have been required to cease their retail operation in the January 2021 lockdown; or
- Businesses that had retail services restricted during January lockdown. • Businesses that sell directly to consumers.
For these purposes, the definition of a non-essential retail business should exclude:
- food retailers, including food markets,
- supermarkets, convenience stores, corners shops;
- off licences and licensed shops selling alcohol including breweries
- pharmacies and chemists
- animal rescue centres and boarding facilities
- building merchants
- petrol stations
- vehicle repair and MOT services
- Bicycle shops
- Taxi and vehicle hire businesses
- Banks, building societies and other financial providers,
- post offices
- funeral directors
- laundrettes and dry cleaners
- veterinary surgeries and pet shops
- Agricultural supply shops and agricultural markets including livestock markets or auctions
- dtorage and distribution facilities
- dentists, opticians and those that provide audiology, chiropody, chiropractic, osteopathic and other medical or health services, including those related to mental health
- car parks
- outdoor markets