A relief fund worth £300m set up by Philip Hammond, the Chancellor, to support small firms struggling under the weight of business rates rises has proved a “false hope” after failing to pass on tens of millions of pounds 300 days after its launch.
Research by Gerald Eve, the property consultancy, has found that more than £70m of the £175m allocated to councils for the year to March 2018 has yet to be passed on to local firms.
The Federation of Small Businesses said some of its members were still waiting for the essential funding.
“Our research showed that one in five firms facing business rates hikes were planning to sell, hand-on or close their business,” said Mike Cherry, the chairman. “The Chancellor’s £300m hardship fund offered a small glimmer of hope. For many, it’s proved to be false hope.”
Mr Berry added that it was “really shocking” that local council’s schemes had “given out very little, and in some instances none, of the money they’ve been allocated”.
“And of course there’s no guarantee that councils will have access to their year-one allocation once we get to April,” Mr Cherry added.
The business rates regime was changed in the 2016 Budget. It was predicted that 600,000 firms would cease paying rates because of the change. However, some companies, particularly in the South East, have suffered huge rises.