SHOCK GRANT U-TURN FOR PUBS
Updated: Oct 31
Many pubs that closed a fortnight ago when tier three alerts kicked in, will be stunned to find they are not eligible for grant support and now face real issues in claiming staff wage support.
Tier three instructions instructed pubs to close by law in mid October, but did not clearly state they must stay open if they could serve food, simply saying that pubs,"can only remain open where they operate as if they were a restaurant."
Now the goal posts have been significantly moved as in a stunning volte-face some LRSG applications forms clearly state the support grant is now only available to "Pubs and bars who cannot operate as if they were a restaurant."
This means that if the local authority deems a largely "wet" pub could have chosen to stay open, regardless of the economic non-viability of such a pivot in the midst of a pandemic, they will not be eligible for the full support grant.
"Businesses that have chosen to close or have been severely impacted by the local restrictions will be subject to a different application process and we are awaiting national guidance before we launch our scheme."
For struggling landlords with no revenue for a fortnight, who reluctantly closed to prevent the spread of Covid in Tier 3 areas, but in the full anticipation of promised support, this is a massive kick in the teeth.
Towers + Gornall also understand that Local Authorities will follow up LRSG applications by pubs and confirm if they could have stayed open and operated as a restaurant.They could choose to withhold the full grant for that period, where the pub has have previously provided food service before it closed.
The first online grant applications to go live, so far only cater for those businesses closed by law, with no sign as yet of the follow-up discretionary help for businesses that have seen a severe drop in demand in tier 2 and tier 3 areas and where they remain open.
Each council is still scrambling to define its policy for those additional businesses and only then will make a form available, if funds stretch that far.
URGENT STAFF WAGES SUPPORT ISSUES
There is a further serious consequence as on November 1st the Job Support Scheme begins and the bar staff in pubs that are closed, are expected to be paid 67% of their wage by the government.
What happens now to those staff in closed pubs that couldn't justify serving food as it wasn't economically viable? If the pub is deemed ineligible for the L.A. grant the staff will not be eligible for the JSS Closed.
Those pubs will have to re-open, just so their staff can claim the JSS Open, where they have to be guaranteed 20% of their working hours and the pub itself can be eligible for the lesser discretionary grant, when that is belatedly announced by the local council.
The whole genesis of the closure plan was to prevent the spread of Covid, but now those business may be forced to open their doors to get that support, just as Covid accelerates across the nation and fewer and fewer families want to risk going out to dine in pubs.
Local Restriction Support guidance to L.A.'s from government is :-
The LRSG will help businesses that due to the government's local or national restrictions: -
a) Businesses closed by law, that had an R.V. at the point of closure
b) Businesses still open with an R.V. categorised on the ratings list as Hospitality, Leisure, B&B’s and Accommodation and where demand is severely curtailed
due to local restrictions on socialising
Only then if funds remain from a discretionary 5 % top up fund from central government other business in associated categories where demand has been severely curtailed by local restrictions may be eligible.
BUSINESSES CLOSED BY LAW IN TIER 3 IN ENGLAND
RECOMMENDED GRANT LEVEL AND FREQUENCY
The amount you get depends on the rateable value of your premises.
You will receive support for every two weeks your business is closed, and this will be paid every two weeks that you are required to remain closed.
Rateable value and support per 2 weeks per 4 weeks
£15,000 or under £ 667 £1334
£15,001-£50,999 £1000 £2000
£51,000 or over £1500 £3000
You can find the rateable value of your premises on your latest business rates bill.
Who qualifies for this grant?
To qualify for this grant, your business must be have been:
open as usual before the restrictions.
providing services in person to customers from the premises.
required to close due to local lockdown restrictions imposed by government.
paying business rates for the premises at the point of closure
Businesses required to close under local restrictions - from 00:01 on Saturday 17 October
Pubs (can only remain open where they operate as if they were a restaurant)
Bars, and nightclubs
From 00:01 on Monday 19 October, the following venues also closed:
Adult gaming centres
Bookmakers and betting shops
Children's soft play centres
Car boot sales
Your business will not qualify for support under this scheme if it was in administration, insolvent or a striking off order was made at the time local restrictions started.
OPEN BUT SEEING SEVERE FALLS IN DEMAND
The government is providing additional funding to allow Local Authorities to support businesses in High-Alert (Tier 2) level areas, which are not legally closed, but which are severely impacted by the restrictions on socialising.
Additional funding has been awarded to Lancashire, which will be used to support Hospitality, Hotel, B&B, and Leisure businesses which are not legally closed but are severely impacted by the restrictions on socialising.
Government suggested that support should follow these guidelines, though final decisions are made by each Local Authority dependent on their level of funding, the number of those business locally, along with the amount of any grant
Rateable value of premises per 2 weeks per 4 weeks
£15,000 or under £ 467 £ 934
£15,001-£50,999 £ 700 £1400
£51,000 or over £1050 £2100
Local Restriction Support Grant Application pages will be added as they go live here :-
Do state aid rules apply?
The Local Restrictions Support Grant counts towards state aid.
The rules are fully explained in the government state aid guidance. By accepting this grant, you must confirm that you are not in breach of these rules.