Emergency Support Scheme Mistakenly Paid Out Grants To Businesses Who Weren`t Eligible

An audit office report has revealed that an emergency support scheme, set up for small businesses who were being badly affected by Covid restrictions during lockdown, may have paid out a total of £13.5 million to businesses who were not eligible. Not only that it seems unlikely that a great deal of this money will ever be recovered.

The Small Business Support Grant Scheme Was An Emergency Scheme

The Small Business Support Grant Scheme was set up as an emergency scheme to an ongoing crisis, but the checks that should have been made to ensure that businesses were eligible for a grant were often not made due to the scheme being rolled out as quickly as possible. As no proper assessment of need was made, many of the small businesses who were paid out were not actually in any real hardship due to the pandemic and so were incorrectly given a grant. While £1.76 million has been so far recouped it is unlikely the vast majority of money incorrectly paid out will ever be recovered.

The scheme was introduced in March last year and paid out one-off emergency grants of £10,000 to small businesses, who were felt to be under threat due to the Covid-19 pandemic. The payments were issued to all businesses who were in receipt of small business rates relief.

No Evaluation Was Undertaken

Here is what the report found, as quoted in an article on the Belfast Live website:

“No evaluation was undertaken to quantify the potential level of funding likely to be issued to those who did not require it.”

The report added: “On the same day that the online portal for applications went live, £67.7million was paid via push payments, directly into the bank accounts of those businesses identified on the LPS database as eligible for SBRR and which paid their rates via direct debit.

“These payments were made without State Aid approval from the European Commission.”

Scheme Launched Under Challenging Circumstances

In mitigation, Northern Ireland’s Auditor General Kieran Donnelly, is quoted in the same article, saying:

“It is important to recognise that this scheme was designed and launched under exceptionally challenging circumstances and at an extreme pace, from the initial announcement on March 18 2020 to first payment on March 26 2020.

“The departments and agencies involved were clearly focused on getting urgent support to businesses, and great efforts were made to deliver this.

“Nonetheless, it is important that the lessons identified in my report are learnt and taken on board

“In particular, I want to highlight the importance of a collaborative approach in developing similar schemes in the future.

“Better early engagement across departmental boundaries and with business representatives would have helped the department target support to those most in need.”