North East businesses facing 'weeks of uncertainty' over emergency covid funding

Sunderland City Council chief executive Patrick Melia.

Struggling businesses could face ‘weeks’ of uncertainty before they can claim new emergency funding.

The second national coronavirus lockdown, due to start tomorrow, is predicted to be another hammer blow to firms which had barely picked up the pieces after previous restrictions were relaxed.

And while cash is expected to be on hand to prop up industries affected, they face an anxious wait while rules are finalised to allow local authorities to start issuing handing outs.

“We will come under increasing pressure from businesses to get grants out,” said Patrick Melia, deputy head of paid service at the North East Combined Authority (NECA).

“The Government has announced businesses impacted by the lockdown will receive certain levels of funding and staff will receive furlough payments.

“At this point we haven’t received the cash from the government, nor have we got regulations detailing how to allocate that and which businesses will be eligible.

“It will cause frustration from the business sector over the next couple of weeks until we get regulations in place in a way that allows us to distribute that.”

Melia, who is also chief executive at Sunderland City Council, was speaking at a meeting of the combined authority’s Leadership Board, which was held by videolink and broadcast via YouTube.

The panel has pleaded with North East families to ‘live by the rules’ in the hope it could mean the region emerges from lockdown faster and paves the way for a speedier economic recovery.

In the meantime, English councils are each due to receive a share of £1.1 billion from ministers, over which Melia expects local authority bosses will be given ‘discretion’ to distribute where they think the need is greatest.

Treasury chiefs have suggested this would be on the basis of £20 per person, meaning the North East could be in line for about £50 million.

The furlough scheme has also been extended, while businesses can apply for a separate Local Restrictions Support Grant if they are forced to close as a result of the latest COVID lockdown.

But Melia insisted essential council services would keep running.

He added: “Guidelines are clear that you should work from home if you can, but there’s a lot of local authority services that can’t do that, like refuse collection, grounds maintenance, social work – that will have to continue and will continue.”