Hundreds of businesses did not receive business rates relief through the £1.5bn Covid-19 Additional Relief Fund (CARF) despite government promises in March 2021, as distribution of the fund has descended into a postcode lottery, according to Colliers.

Latest figures revealed by the government up to and including September 2022 show £1.197bn (or 80%) of the £1.5bn fund announced in March 2021 had been allocated to businesses, with 230,540 hereditaments (properties) awarded relief across England. This means 20% of the fund had still not been allocated as of the deadline allocation date (30 September 2022).  

Even with any late awards on the deadline date, which have not been included in the figures announced, the scheme appears to have been vastly under allocated, meaning many businesses have missed out, according to Colliers.

Of the £1.197bn paid out, £439.6m has been distributed to businesses in the offices sector, £299.2m to those in factories/industrial and £259.9m for warehousing, storage and distribution. 

The CARF scheme was announced in March 2021 following the government’s announcement that businesses impacted by Covid-19 would not be able to appeal their business rates on grounds of a Material Change of Circumstance (MCC). The new £1.5bn relief fund was to compensate those businesses affected by Covid-19 outside the retail, hospitality and leisure sectors, and would be distributed by local authorities to “get cash to affected businesses in the most proportionate and equitable way”.

According to Colliers, this new fund vastly under-estimated both the size of the problem and the capability of local authorities to pay out in an efficient and consistent way and the system was continually mired in bureaucracy and delay.

Colliers head of rating, John Webber, said this was because the government allowed local authorities discretion to allocate funds as they saw fit rather than provide a standard guidance for allocation and distribution. This created “carnage” and a “postcode lottery”.

Webber pointed out that the system was particularly difficult for any business with multiple sites, having to manage multiple schemes each with its own criteria, exclusions, varying evidence and information requests and deadlines.

The latest figures reveal that 75 local authorities had paid out all of their grant allocations as of September 2022, but this only represented 24.3% of the 309 local authorities in England. While it is possible that some local authorities did not make their determinations until the 11th hour of the deadline date and had not sent their returns to government, Colliers said this highlighted the complexities, bureaucracy and delays by using this methodology to distribute the fund.

“The picture is a disgrace,” Webber said. “Eighteen months on from the time businesses were denied their right to appeal their business rates, one fifth of the allotted £1.5bn had still not been allocated to such businesses, despite the passing of the allocation deadline date. 

“One can only conclude that it would have been a much different and better picture for businesses if they had been allowed to appeal their rates bills under the MCC rules,” Webber added.