Aberdeen has been left £6 million out of pocket – as the Scottish Government delays providing funding for Covid grants that kept businesses afloat through the worst of the pandemic.
There is a warning any further delay beyond the start of next month could have a “serious impact” on the council and those who applied for help.
Aberdeen City Council paid out £21.7m to businesses and traders whose livelihoods were impacted by coronavirus and the lockdowns imposed as the NHS struggled to cope with demand.
Local authorities were tasked with doling out the cash, which was promised by the Scottish Government.
But now, Aberdeen Journals has been given sight of an internal brief – penned by one of the council’s top bookkeepers – detailing the multi-million-pound hole in the city’s finances.
It also reveals ministers have pushed back the date the money will be transferred on three occasions – resulting in a two-month wait.
A government spokesman has confirmed all local authorities due money are facing the same 61-day hold up, which is being blamed on some not providing necessary details to ministers before the previous deadlines.
Aberdeen has faced a two-month wait for outstanding £6m
In Aberdeen, around £1m of the outstanding debt is directly to pay for the extra support promised to cover the lockdown the Granite City was thrust into last August, as a cluster of Covid cases was traced through a number of bars.
More than 220 cases were linked to the outbreak first linked to the Hawthorn Bar.
So far, £15.7m of grant funding has made the 130-mile journey from Holyrood to the Town House, with a pledge made in mid-August that the remainder would arrive on September 1.
But top council brass were then told it would be delayed until October 1, then October 7, before the government finally set a date for November 1.
Aberdeen council leader: Delay in coronavirus business grant money ‘disappointing’
Council leader Jenny Laing warned the “disappointing” situation could have a “serious impact” on the authority and businesses, as the local authority had only dished out the cash on the basis the Scottish Government would pay them back.
Aberdeen Labour’s Mrs Laing said: “Despite the Scottish Government’s continuing failure to provide the council with its full share of business grant funding we have where possible ensured that businesses who have needed financial support have received it as and when required.
“When you considered the financial constraints, councils are working under it is simply unacceptable that the Scottish Government has still to settle this £6m shortfall particularly when you realise it includes the £1m of funding which they agreed to pay when they locked down the city back in July 2020.”
Council chiefs have now been tasked with gaining a “cast-iron guarantee” that payment will come by the end of the month.
“Throughout the pandemic, the SNP Government has made dozens of announcements explaining how additional funding received from the UK Government would be used to support businesses and local authorities; however it’s become clear money announced is often not money paid,” Conservative finance convener, Ryan Houghton, told us.
“Our officers will continue to ensure any grant funding schemes the council puts in place will pay quickly to help those affected by Covid-19 including the recent business transition fund, but we need the devolved government to play its part.
“Council officials have now been asked to ascertain confirmation from the Scottish Government that there will be no more delays.”
Government claims councils are to blame for the two-month delay in Covid grant payments
The council leader’s comments were put to the government, with a spokesman asked to directly address the two-month delay in getting the money to cash-strapped councils.
He answered: “Since the start of the pandemic, businesses have benefitted from more than £4.3 billion in support and we have worked closely with local authorities to deliver many of these vital funds.
“Final payments to all local authorities will be made on 1 November.”
The statement also claimed the November 1 payment ensured all councils due cash would get it at the same time, including those who had met previous deadlines for claims and those who had not.