Time is running out for small businesses as growth hubs shut their grant applications down

Small and medium sized enterprises are increasingly being turned away for grants under the Growth Hub scheme as some have been swamped with a frenzy of applications.

It comes after the Government introduced a £20million funding initiative in June to help SMEs across England recover from the effects of the coronavirus pandemic.

The £20million is being split up and distributed to various counties through Growth Hubs in what is understood to be varying amounts.

Time is running out! Some Growth Hubs are already turning SME applicants away and the cut-off for grants to be be awarded is 28 February 2021

SMEs can apply for grants of between £1,000 to £5,000 to help them access new technology, equipment as well as professional, legal, financial or other help.  

All of the money will come from government and there will be no obligation for SMEs to contribute financially.  

A MHCLG (Ministry of Housing, Communities & Local Government) spokesperson explained: ‘Growth Hubs have received a large volume of enquiries and each of them will be able to provide you with further information on timing and the process for applications.

‘The scheme is expected to be competitive and, in most cases, will be awarded on a first come first served basis. 

‘Where the number of applications exceeds the available funding, it is expected that local schemes will close.’

It’s still unclear how many applicants have applied for these grants and data on this will only be produced in a couple of months. 

The MHCLG spokesperson added: ‘Information on the number of applications made will be available on a quarterly basis, starting from October in line with reporting requirements.’

Have all Growth Hubs run out of cash?

Some Growth Hubs have already closed their applications to new expressions of interest enquiries.

One reader applied for a grant through the Herts Growth Hub but was then sent an auto response email saying that she was being put on a waiting list.   

It said: ‘Thank you for your interest in the Respond, Adapt and Strengthen Grant. We have had an enormous amount of interest, as you can imagine, and we have had to deal with requests on a first-come, first-served basis as to when the expressions of interest came into us. 

‘We have now had to close applications but will keep your details on a waiting list, in case we can open again.’

Confusingly, not all Growth Hubs have completed their allocations and some such as the Cornwall & Isles of Scilly Kickstart grant scheme and the Kent & Medway Growth Hub’s South East Covid Recovery Grant (SEBCOR) are still are still welcoming expressions of interest.

What are Growth Hubs and how are they being funded? 

The £20million funding for small enterprises is being channelled through Growth Hubs. 

Growth Hubs are local public/private sector partnerships led by the Local Enterprise Partnerships (LEPs). 

They join up national and local business support so it is easy for businesses to find the help they need.

A spokesperson for the MHCLG (ministry of housing, communities & local government) said: ‘Growth hubs are a tried and tested route to support businesses with extensive knowledge and experience in this field and are well placed to provide this support quickly and effectively.

Grant schemes are 100 per cent funded by the European Regional Development Fund (ERDF).

An MHCLG spokesperson said: ‘We have left the EU, but we continue to participate in EU funding programmes as these wind down. Projects will receive funding until the end of the current programme in 2023. 

‘We will target the UK Shared Prosperity Fund at the UK’s specific needs, and will, at a minimum, match the size of European structural funds in all four nations. 

‘We are working closely with interested parties across the country as we develop this Fund and to allocate all remaining EU funding.’

The Cornwall & Isles of Scilly Growth Hub refused to comment on any possible impact that Brexit could have.  

Wider Growth Hub projects are part funded by the ERDF. For example, Cornwall and Isle of Scilly Growth hub project is part funded with £2,435,909 from the ERDF, which is matched by Cornwall Council, the Department for Business, Energy & Industrial Strategy and the Cornwall & Isles of Scilly Local Enterprise Partnership.  

On its website the Kent & Medway Growth Hub says it is ‘working hard to put an application process in place to allow business to access this funding’ and that in the meantime ‘you may add your details to our expression of interest list’.

Meanwhile, the Cornwall & Isles of Scilly Kickstart grant scheme website says it will open for applications from local businesses at 10am on Wednesday 2nd September. 

It’s not clear why some Growth Hubs are ahead while others are behind in awarding grants and processing applications.

A source close to the Kent & Medway Growth Hub offered an explanation. 

Referring in particular to the Kent & Medway Growth Hub, he said: ‘The grant providers don’t have everything in place and ready to go which is why we’re asking people to leave an expression of interest. 

‘When it is ready to go we can hand the expressions of interest files over to the grant providers.’

He adds that the team were expecting a ‘go live’ date in August. But at the time of writing, no news yet been provided. 

The source said: ‘We don’t have a go live date yet but they are preparing a team as we’ve has a lot of expressions of interest.

‘I suspect by early next week that the ball would start rolling and they will start contacting everyone. We don’t know how it will work whether a link will be sent…’

When asked why he thought there was a discrepancy on the timings between different Growth Hubs, the source said: ‘I don’t know. Different counties and local authorities work at different time frames. It’s difficult for all to follow the same protocol.’

Which SMEs can apply? 

The MHCLG (ministry of housing, communities & local government) has said that SMEs of all sectors are eligible to apply.

Activities supported through the funding must be to directly respond to the impact of coronavirus and can include:

An MHCLG spokesperson added: ‘It’s for each Growth Hub to set up their own scheme based on these eligibility criteria.

‘Businesses should contact their local Growth Hub which will be able to provide further information on what activities are eligible, timing and the process for applications.’

How much cash could each business get?

The grant thresholds differ between the various Growth Hubs. The MHCLG explained: ‘Growth Hubs are responsible for working with businesses in their area who wish to apply for the grants, support and advice available.

‘They will also be able to provide further information on what activities are eligible, timing and the process for applications.

‘The nature and value of grants awarded will reflect the needs of the businesses applying and will typically be up to £3,000. Under certain circumstances, and on a case-by-case basis, grants of up to £5,000 may be awarded.’

To date there have also been no stats published on how many SMEs have qualified for grants or how much has been paid out so there’s no way of immediately knowing which Growth Hubs are closed for applications.

When pressed about this lack of information, the MHCLG spokesperson says: ‘Growth Hubs have received a large volume of enquiries. Information on the number of applications made will be available on a quarterly basis, starting from October in line with reporting requirements.’

For Growth Hubs that have not yet allocated grant monies to various SMEs, there’s still time to award them.

The MHCLG said the cut-off for grants to be awarded is 28 February 2021, with activity fully completed by 31 March 2021. More information about which Growth Hub to approach can be found on the Lep Network’s website.  

SMEs can apply for grants of between £1,000 to £5,000 to help them access new technology, equipment as well as professional, legal, financial or other help.

SMEs can apply for grants of between £1,000 to £5,000 to help them access new technology, equipment as well as professional, legal, financial or other help.

Kickstart scheme fiasco

The £20million SME grants come on top of the £2billion kickstart scheme, which is designed to help thousands of young people living off universal credit (UC) get work as the scheme subsidises their salaries for the first six months.

But to date companies and unemployed youth have been left in limbo as they wait for the Department for Work & Pensions (DWP) iron out the final details. 

Chancellor Rishi Sunak promised further details of the kickstart scheme this month, but time is fast running out with only one working day left.

When asked about the delay, the Department for Work & Pensions (DWP) told This is Money that an announcement would be ‘made soon’.

Some companies have already advertised for these roles on online recruitment platforms such as LinkedIn and Monster but the DWP has urged them to remove them until further notice. This has led to some online platforms scrambling to remove the related job adverts.

Small Business Essentials

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