Coronavirus (COVID-19) business support: equality impact assessments

Small Business Grant (SBG) and Retail, Hospitality and Leisure Grant

Name of Grant:

Small Business Grant (SBG) and Retail, Hospitality and Leisure Grant (RHLG)

Policy Lead

Anouk Berthier

Legal power used:

Sections 126 and 127 of the Housing Grants, Construction and Regeneration Act 1996

Grant Overview:

The grants were intended to help protect jobs, prevent business closures and promote economic recovery at the beginning of the COVID-19 pandemic.

They were targeted to support small businesses, and those medium-sized businesses in the retail, hospitality and leisure sector, who were liable for non-domestic rates in order to maximise the number of businesses that could be supported and to ensure the funding could be distributed swiftly.

Small Business Grant

Grants of up to £10,000 for small businesses across Scotland in receipt of certain non-domestic rates reliefs: £10,000 was available on the first property from 1 April to 5 May 2020, and this was expanded in Phase 2 to provide an additional £7,500 on each subsequent eligible property from 5 May 2020. From 8 June 2020, eligibility was extended in Phase 3 to businesses that were not the ratepayer for a property, but could evidence that they contributed towards the charges associated with the non-domestic rates liability (i.e. in examples where the landlord retained the rates liability). The scheme closed on 10 July 2020.

To be eligible, the property had to be used for specific property classifications set out in the appropriate Local Government Finance Circulars (explained below). This approach sought to avoid rewarding non-domestic properties which were not occupied by ‘small businesses’ in the traditional sense e.g. billboards, ATMs and car parking spaces.

Retail, Hospitality and Leisure (RHL) Grant

Grants of up to £25,000 for properties in the retail, hospitality and leisure sectors with a rateable value between £18,001 and up to and including £51,000. £25,000 was available on the first property from 1 April to 5 May 2020, and this was expanded in Phase 2 to provide an additional £18,750 on each subsequent properties from 5 May 2020. The scheme closed on 10 July 2020.

For both schemes, the property had to be used for specific property classifications to be eligible – set out in Local Government Finance Circulars 5/2020 which was superseded by Circular 8/2020 and supplemented with Circular 9/2020 and 11/2020. The circulars are available at Local Government Finance Circulars

Property use and occupation was as at 17 March 2020 to mitigate against behaviour changes or potential abuses of the grant funds as a result of the scheme being announced on 18 March 2020.

Executive Summary:

The Scottish Government understands the impact COVID-19 has had on businesses, and took immediate action within the devolved powers and resources at its disposal to provide a package of support for business. which now totals an estimated £4.4 billion since March 2020. This emergency funding has supported otherwise strong and viable businesses, protecting the business base, jobs and livelihoods helping prepare for a stronger economic recovery.

In order to address the needs of many sectors adversely impacted by the pandemic, a range of business support funds were introduced over several months to provide emergency funding to help secure jobs, safeguard businesses and to alleviate hardship following the announcement of the first funds of this sort by the UK Government on 11 March 2020 and further extended on 17 March 2020.

The Small Business Grant and Retail Hospitality and Leisure Grant schemes formed part of the initial tranche of COVID-19 business support measures and were designed and delivered to ensure businesses were supported swiftly following the closure of many business premises in March 2020 as part of the public health response to COVID-19. Eligibility to the schemes was linked to the non-domestic rates system because it was the fastest, most effective way to reach businesses.

The schemes were kept under review and in response to the feedback from business, they were expanded twice; and a discretionary element introduced for local authorities in order to allow the scheme to flex to local circumstances.

Key Findings - impact assessment of benefits and/or disadvantages.

The schemes were targeted to support small businesses, and those medium-sized businesses in the retail, hospitality and leisure sector, who were liable for non-domestic rates in order to maximise the number of businesses that could be supported and to ensure that funding could be distributed swiftly. There was recognition that the design of the scheme could not be perfect and would exclude businesses who were not liable for non-domestic rates such as mobile businesses or those without physical property, considerations were ongoing on how best to support other businesses not eligible for these grants.

Non-domestic rates are a tax levied on the occupier (this can be a company, an individual, etc.) of non-domestic lands and heritages, or the owner of the property if the latter is vacant. Non-domestic rates are levied on the private, public and third sectors, with a range of reliefs available both during and outwith COVID-19.

Each rated non-domestic property is listed on the valuation roll, with the description assigned by the assessor (e.g. shop), and the rateable value and address of the property, as well as the address of the proprietor, tenant or occupier and certain other rating-specific variables (e.g. any residential apportionment). The valuation roll does not contain any characteristics of property owners or occupiers as this is not relevant for rating; and while most reliefs require applications, councils do not either collect or generally hold information on the characteristics of property owners or occupiers – protected or otherwise. It is therefore not possible to appraise the impact of grant funding based on NDR policy with certainty on protected characteristics.

Notwithstanding, given that non-domestic rates are a universal tax on non-domestic premises (in the sense all rateable non-exempt non-domestic premises are liable for NDR), it can be assumed that there is generally a low risk of a policy in this area having a disparate and adverse effect, direct or indirect, on protected characteristics. Further, given the broad coverage of the two schemes, it is also sensible to assume that there is a low risk of grant funding based on the NDR policy having a disparate and adverse effect, direct or indirect, on protected characteristics.

Self-catering premises were initially ineligible for the grant schemes on the basis that often these premises were not businesses in the traditional sense and would include second homes or investment opportunities. However the scheme was expanded prior to launch to include self-catering properties and caravans where receipts represented a primary source (e.g. one third or more) of earnings for the ratepayer and the property was let out for 140 days or more in financial year 2019-20. This was intended to capture the majority of ratepayers that had diversified into self-catering to support their income, particularly in rural areas, while ensuring second homes were not eligible.

Age: Older People and Children and Young People

As stated above, it is not possible to distinguish any potential differential impact on different sectors of society based on protected characteristics, however given the broad nature of the two schemes, there was no reason to expect a particular impact specifically on this characteristic.

Sex: Men and Women

As stated above, it is not possible to distinguish any potential differential impact on different sectors of society based on protected characteristics, however given the broad nature of the two schemes, there was no reason to expect a particular impact specifically on this characteristic.

Race

As stated above, it is not possible to distinguish any potential differential impact on different sectors of society based on protected characteristics, however given the broad nature of the two schemes, there was no reason to expect a particular impact specifically on this characteristic.

Disability

As stated above, it is not possible to distinguish any potential differential impact on different sectors of society based on protected characteristics, however given the broad nature of the two schemes, there was no reason to expect a particular impact specifically on this characteristic.

Religion and Belief

As stated above, it is not possible to distinguish any potential differential impact on different sectors of society based on protected characteristics, however given the broad nature of the two schemes, there was no reason to expect a particular impact specifically on this characteristic.

Sexual Orientation

As stated above, it is not possible to distinguish any potential differential impact on different sectors of society based on protected characteristics, however given the broad nature of the two schemes, there was no reason to expect a particular impact specifically on this characteristic.

Pregnancy and maternity

As stated above, it is not possible to distinguish any potential differential impact on different sectors of society based on protected characteristics, however given the broad nature of the two schemes, there was no reason to expect a particular impact specifically on this characteristic.

Gender reassignment

As stated above, it is not possible to distinguish any potential differential impact on different sectors of society based on protected characteristics, however given the broad nature of the two schemes, there was no reason to expect a particular impact specifically on this characteristic.

Marriage or Civil Partnership

As stated above, it is not possible to distinguish any potential differential impact on different sectors of society based on protected characteristics, however given the broad nature of the two schemes, there was no reason to expect a particular impact specifically on this characteristic.

Socio-economic disadvantage: any people experiencing poverty

These grants were a direct cash benefit to the occupiers of eligible properties awarded by councils based on Scottish Government guidance.

As stated above, it is not possible to distinguish any potential differential impact on different sectors of society based on protected characteristics, however given the broad nature of the two schemes, there was no reason to expect a particular impact specifically on this characteristic.

Stakeholder Engagement:

We have engaged extensively with businesses and their representative organisations during the pandemic. In the year to March 2021 the Scottish Government had more than 1,270 ministerial engagements with business, including virtual conferences, roundtables and calls.

Engagement with local and business leaders included regular communication with:

COSLA/ local authorities; as well as CBI, FSB, SCC, Scottish Retail Consortium, etc.

This provided an opportunity to listen to stakeholder views, test ideas, share information about progress and discuss and address specific issues identified by sectors and individual businesses.

In particular, officials had ongoing, regular discussions with Local Authorities throughout the operation of the grant scheme to encourage a consistent approach to any issues raised and to clarify eligibility to the schemes where appropriate.

Mitigations:

There were three distinct phases to the grant schemes. Phases 2 and 3 were developed in response to issues that had been raised throughout the operation of Phase 1 of the scheme. Phase 2 expanded grants to ratepayers with multiple eligible properties. Additional grants were awarded at 75% of the grant value for the relevant fund. It also extended eligibility for the Small Business Grant Scheme to ratepayers with one or more properties in the RHL sector whose cumulative rateable value was between £35,001 and £51,000 and where the individual rateable value did not exceed £18,000 (these premises would have been ineligible for Small Business Bonus Scheme and therefore ineligible for the grants in Phase 1).

Phase 3 extended eligibility of the Small Business Grant to the tenants or occupiers of non-domestic properties used for a qualifying purpose, where they were not the ratepayer but could evidence that they were required to contribute to the charges associated with the non-domestic rates liability via the ratepayer. This was designed to benefit businesses which had been ineligible for any business support grant to that date. It was also not intended to be accessed by self-employed individuals or sole-traders for whom other support (e.g. the Self-Employed Income Support Scheme) was intended. Phase 3 also further extended the cumulative rateable value threshold for ratepayers that held one or more properties in the RHL sector from £51,000 to £500,000 where the individual rateable value of the premises did not exceed £18,000.

Next Steps (if any):

N/A

Declaration and Publication

I have read the Equality Impact Assessment and I am satisfied that it represents a fair and reasonable view of the expected equality impact of the measures implemented.

Signed: Ellen Leaver

Date: 19/10/2021