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Accountancy fee grants ‘became a complete lottery’

The demand for the professional services grant which covers accountancy fees has left a huge number of accountants empty handed.

9th Oct 2020
Community Assistant AccountingWEB
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Lottery ticket
Accountancy fee grants 'became a complete lottery'

The £20m professional services grant fund that aimed to help virus-hit small and medium sized businesses get back on track with professional advice such as accountancy has not lived up to the profession’s expectations.

“I knew there wasn’t enough to go around,” Corporate Finance Network chair Kirsty McGregor said of the scheme. Only 300 grants available for a whole county “wasn’t a lot when we knew there was going to be a lot of demand.”

The scheme was announced at the end of July by Simon Clarke, minister for regional growth and local government, to give small and medium-sized businesses “the support they need to continue to thrive”.

‘It became a complete lottery’

But as McGregor said on this week’s Any Answers Live: “It became a complete lottery.”

She added, “I’ve not heard of anybody who has actually had funding from this yet. The nice headlines caused us all to get excited, but it never quite materialised.”

McGregor raised issues that had already been brought up by AccountingWEB members: for example, the grant values differed depending on the areas where they were claimed, with grants averaging £3,000 and the maximum £5,000 amount being awarded only in exceptional circumstances.

The opening dates differed massively by region, with some readers reporting that their councils closed down applications rapidly after being overwhelmed by needy businesses. AccountingWEB reader DCR reported that in Cornwall the system only lasted 10 minutes.

Live panellist and founder Paul Layte FCA called the grant a wet firework that “didn’t go off as planned”.

“From an accountant’s perspective, we know it’s not one piece of work that can restore a business to full health,” Layte said. “It requires funding spread over a long period of time.”

He opted instead for working with clients to implement their own programmes to nurse their businesses back to health over an extended time. 

To business and beyond

When McGregor previously discussed the grant on AccountingWEB’s No Accounting for Taste podcast she was full of hope for the outcome of the professional services grants.

McGregor admitted that she had been “young and naive” at the time. The reality of the situation did not live up to what accountants were hoping for.

Instead, as AccountingWEB’s editor Richard Hattersley quipped, the proposal ended up as the Buzz Lightyear of grants: “You spend all day queuing up only to not get one.”

Confusion in the community

Frustration about access to professional services grants spilled over into Any Answers. AccountingWEB reader atleastisoundknowledgable launched a rant about the covert nature of the grant announcement.

“How the hell did I not know about the £1k-£3k post-Covid grants for SMEs to spend on strategy/business plans/forecasts etc?” they commented. “I found out the day after initial applications shut for Manchester. That's a lot of business that I've not added… I'm furious with myself.”

Paul Crowley responded that if the scheme was that well known, accountants would have received calls from clients asking how to claim them.

Johnt27 said that this was similar to other Covid-19 incentives where the money actually given differed depending on the business’ region: “I’ve given up with these and am pointing clients towards the (more generous) grants in relation to implementing technology connected to making customs declarations post Brexit.”

Cheshire asked fellow Mancunians: “Don’t you find the councils in and around Manchester hide stuff?”

Another member suggested regularly searching for the words grant, scheme, or save, claiming it to be “the only way” to find out about such things. 

While some users united in the outrage of not knowing about the announcement, Memyself-eye assured the original poster that “there are all sorts of grants” in place and that accountants can’t be expected to know them all.

Even with adequate access to the scheme, however, many accountants complained that the amount of money on offer was far too low to actually help each and every struggling business. 

Have any of your clients been able to get their hands on the loan? How useful has it been in building back their business?

Replies (11)

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By tanyajackson
09th Oct 2020 09:52

I contacted my local Growth Hub who advised me that the grants were all taken within in the first few days of launch. Absolutely not enough to go around.
Any accountants out there giving themselves are hard time about not getting there quick enough, don't. You actually had better chance of winning the Lotto.

Thanks (3)
By Mr J Andrews
09th Oct 2020 10:01

Simon Clarke , Minister for Regional Growth & Local Government. A grand title indeed. But an evidently dumb scheme. You really can't make these fiascos up.
What next Minister ?

Thanks (2)
By 0098087
09th Oct 2020 10:01

We were told the local growth hub and there was nothing on their website or mail out.
Been told nothing. When you hear of the stories of the businesses that have been getting 25k for just being no bigger than a shed it's a scandal. But just like everything with the way this crisis has been managed nothing surprises me.

Thanks (3)
Replying to 0098087:
By 0098087
09th Oct 2020 10:09

Yes we are still working and yes we didn't get covid, but the stress levels over Furlough have been enormous. The very small firms are the forgotten few.

Thanks (2)
Helen Froggett Thomson
By Helen Froggett-Thomson
09th Oct 2020 10:14

I was aware of the grant as I saw a tweet about it from our local county Growth Hub (as it was these bodies who were tasked with giving out the money). I informed all our clients via newsletter but the Growth Hub refused to give out an exact day for when they were going to announce it and said it would be given out on a 'first come first served' basis. Herts had grants of up to £5,000 per company available. They said the pot was not very large. I kept an eye on their website and by Thursday of the week I was told it would be announced, was feeling slightly irritated and asked them when it would be announced. To which they replied, that it have been announced the day before and it was oversubscribed within 90 mins and the portal was now closed. They announced it via twitter (and 'news' channels which I was too apoplectic to enquire about). They were asking companies to submit an 'expression of interest' (because you can't make a coherent proposal that quickly surely?) and I imagine that people who were taking it seriously (like you have to with most grants) would have missed the boat. I was fuming about the way they handled it. It was as if they actually didn't care. And they almost resented being in this position of giving out 'free money'. There was no indication that they were going to vet/prioritise the quality of the applications or what the company was spending it on (other than the stated overall brief which was professional services and some capital items were also allowed in Herts). As it happens, one of our clients was able to submit an 'expression of interest' before the portal closed so I will be interested to find out what happened/happens next.

Thanks (1)
Woolpit Gus
By nutwood
09th Oct 2020 10:46

This is the first I've heard of this grant - despite being signed up for the Covid related GOV.UK emails (4509 since 23 March) - including the Birmingham City Council weekly email newsletter. I don't think it would have been relevant to any of my clients anyway but what else have I missed?

Thanks (1)
By webpoints
09th Oct 2020 11:16

My local Growth Hub said demand would be high. The portal was meant to open at 10.00h but didn't. I tried to access the portal as soon as it did open and received an auto message that the portal had closed as all grants had been taken. Businesses like ours are now being asked to act like lemmings leaping off a cliff. There is something not quite right happening here. This is relevant targeted funding and much more needs to be channelled through this route. It is the only type of COVID-related funding that could have applied to us - we have not furloughed anyone, we don't pay business rates anyway and we haven't claimed any soft loans.

Thanks (2)
Replying to webpoints:
By 0098087
09th Oct 2020 11:26

I felt this was a good time to use the grant money to start the upgrade for MTD and potentially more work..but looks like we will miss out.

Very very disappointed as it actually felt like we would get some reward for what we've done. Still, shouldn't have been surprised. To be quite honest i'm surprised any government minister has the nerve to show their face on tv.
Brexit rubbish dictating how the track and trace app would be built and using Excel to run it..What a joke...

Thanks (1)
By michaelbeaver
09th Oct 2020 12:09

This is actually the first I've heard about it! And here I was thinking I was across most of what was going on for the demographic of my clients.

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By carnmores
09th Oct 2020 14:02

i thought this was for clients not accountants ;-)

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By SXGuy
09th Oct 2020 14:45

I contacted every client who needed support, didn't hear from 1 who said they applied. Maybe they did and got turned down I don't know. Personally the criteria for being accepted was so stupid and most of it didn't even fit with the SMEs I deal with, they probably looked and said, I won't be getting that grant or its too complicated for me.

Thanks (1)