A Government minister has said he will consider requests made by Cornwall Council for more funds to help businesses hit by the coronavirus crisis and for cash to replace EU funding.

Simon Clarke, minister for regional growth and local government, has been in Cornwall this week on what he said was a “listening exercise”.

He used the visit to announce £1.9million of extra funding for small businesses which includes £500,000 for Cornwall. Although the money has actually come from EU funding from the European Regional Development Fund.

Cornwall councillors said they felt that the announcement may not be welcomed by the 3,500 businesses which have missed out on grants provided by the Government to help firms.

The council had asked for the Government to allow it to retain £27m which was unspent from previous grant schemes in order to provide grants to all businesses which need help.

But the Government has indicated that it will be taking back all unspent money by the end of August.

Mr Clarke said: “I am also announcing £20m of new money (nationally) to help the tourism sector so this will allow a series of grants of between £1,000 and £5,000 designed to help small businesses access specialist advice on matters such as HR, financial advice or legal advice but also buying new equipment as well to help them adjust to the challenges of the current situation and hopefully that will make a real difference to lots of businesses.

“There is £1.9m for the wider South West of which half a million is for Cornwall.

“It is recognising that Cornwall is a particular hotbed of tourism and that is something that has been reflected in our wider settlement for Cornwall, the total of Government funding has been £441m across all the different arms of government since this crisis began and that reflects the fact that clearly Cornwall, which is such a special place, is extremely exposed to this challenge to get the support that it needs.”

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Asked about the council’s request to keep money so that it could be distributed to the 3,500 businesses which have missed out he said: “I have heard the representations that the council has made on this and they have been made very powerfully. The main scheme Cornwall Council have issued already somewhere in the region of £235m worth of business grants, on top of that we did then create a discretionary scheme to catch those businesses who didn’t come within the boundaries of that main scheme and that has paid out a further £13m so we have built flexibility into that settlement.

“I will, of course, take away what I have heard today but it is important that we focus on the new funding schemes that will be coming available as well and that is certainly something that we are keen to do.”

Tim Dwelly, Cornwall Council Cabinet member for economy and planning, had previously described the decision by the Government to take back the money as “devastating” and said it would put the 3,500 businesses at risk.

He said: “I suspect that businesses in Cornwall, particularly the 3,500 who were hoping for us to give them up to £10,000, will be unimpressed with the announcement today.

“However all funding is welcome. What we really want and what we are calling for is Simon Clarke to take the message back to London that the best way to help Cornish businesses that didn’t get a grant is to use the money that is already there rather than taking it back to London.”

Council leader Julian German added: “Today’s announcement of half a million pounds of business support is welcome but we are aware that the challenges are much greater.

“We want to use the unspent business grant money to help those businesses in Cornwall which need support.”

Falmouth Packet:

Simon Clarke MP

The council has also been vocal about the estimated cost of Covid-19 to the authority which could be as high as £74m.

Mr Clarke said that additional financial support would be provided and, particularly, to help cover the loss of revenue by local councils.

He said: “We have been very conscious of the challenge that’s facing councils, that’s why we have put in place a really comprehensive package of support there has been £3.7billion worth of unringfenced extra money for councils which is obviously an unprecedented sum, but then we have also been working to build a new package which is capable of flexing according to losses as they crystallize from things like sale fees and charges, from cultural attractions, from car parks, designed to compensate councils for the loss in revenue that they are facing.

“When it comes to tax losses we have also committed that we will be putting in place a similar income guarantee for loss of tax income from things like council tax and business rates, the Chancellor will be setting that later in the year at the spending review. The total package therefore will be capable of making sure all councils have the support that they need. At this point, frankly, we still don’t know the full extent of some of those losses but we give the packages that wherever they eventually turn out to be will be able to help councils out like Cornwall.”

Outside of the coronavirus crisis the council is also continuing to prepare for life in Cornwall after EU funding ends as a result of Brexit.

The authority has made a request to the Government for a £700m funding pot over 10 years to replace EU funding as well as more devolved powers so that decisions on how it should be spent can be made in Cornwall.

Responding to questions on this Mr Clarke said: “This is such an important issue, obviously I welcome the fact that we have finally been able to deliver on our commitment on the referendum result to leave the European Union, it’s really important therefore that we make sure that the EU Structural Funds are repurposed and put into a way that actually works better for communities up and down the UK. We will be announcing how we are going to take forward the new UK shared prosperity fund after the spending review this autumn but we have already made commitments that no nation of the UK will be any worse off than they are under the current arrangements and it is obviously really important that we get that distribution right, hence why I am down here listening to the area and making further enquiries about how it can best be done.

“In terms of devolution, we have got a devolution white paper coming up later in the autumn and I am really excited about what that means but it will be taking forward our ambitions to make sure that power and funding sits closer to the places that they benefit. We have had really good conversations with Cornwall which has got a good settlement already but how we could potentially take that further forward still.”