Agenda item

[To consider the support to businesses impacted by the Public Realm work].

 

[Report is marked: To Follow]. 

Several Members raised objections to the report being received on the evening of the meeting, just after 5pm.  The Director of Communications and Visitor Experience apologised for the late report.  Officers wanted to provide as much information as possible and had wanted to wait for the meeting that had taken place with Traders the evening before.  They had also had to seek the permission from RSM to share some of the information that had been provided to them in their full report.   

 

The Cabinet Member for Inclusive Economy also offered his apologies for the late report, which he believed had been necessary because it had been important to meet the Traders on the evening before to share the information with them first.  It had been an intense piece of work which required careful legal considerations. 

 

The Vice-Chair raised concerns about to follow reports and asked it to be noted that he did not want this to be an ongoing issue. 

 

There was an exchange of views about the quality of engagement with traders that had taken place. 

 

A Board Member commented that for future projects of a similar nature it was important to have better planning on how the traders were communicated with and the support they were offered.  

 

The Head of Enterprise gave a presentation on Victoria Street Business Support.  She presented a summary timeline which started in May 2022 and ended on 13 March 2023.  RSM had been appointed to review the previous scheme and make recommendations for improvement for Council consideration and decision.  Their review had taken place between 3 January and 17 February 2023, with their final report being received on Friday, 3 March 2023.  It had been acknowledged that in the Council’s view, there was no legal requirement on the Council to provide support. 

 

The Head of Enterprise stated that the RSM report had made the following points: -

 

·       Whilst a reduction in turnover was often a good indicator of a loss of trade, any support should be based on the loss of profits, a business had suffered as a result of a loss of trade caused by the works.

 

·       The financial review was unlikely to have captured the true loss position, as it focussed solely on the fall in turnover of a business.

 

·       Businesses needed to be individually assessed, to understand the nature of the business and how the work may have affected their operations of loss of profit.

 

·       The periods used in the financial review were not adequate to assess the loss of trade and profits, noting that there was no one size fits all approach to a loss of profits methodology.

 

·       It was unclear how the financial information provided by the traders through the process had not been verified.

 

The Council were considering two options.  The first one involved the consideration of five criteria:-

 

1.     Eligibility Criteria.

2.     Evidence to be provided.

3.     Validating information.

4.     Examining evidence and calculating the loss. 

5.     Calculating disruption payments.

 

The Head of Enterprise described in detail how each of the five criteria would work in practice.

 

The Head of Enterprise presented details on Option 2, this was a more accessible, generic business support ‘relaunch’ grant based on less complicated key criteria.  The overall aim of this was to minimise bureaucracy and therefore the impact of the process on business and the Council, and to deliver the resulting financial support to businesses in the next few weeks / months.  It would maximise the benefit to local businesses and deliver value for money for the public purse.  It would be a fixed one-off payment for those businesses who had engaged with the scheme and provided information.  It would be enhanced by a wider programme of support including events to drive footfall and business advisor support.

 

The Head of Enterprise stated the process would supersede all previous exercises, although where a business had already received a goodwill gesture it would be deducted from any new sum payable through the process.  In order to qualify for the grant, businesses had to have the following criteria:-

 

1.     Currently be in business, open and actively trading and impacted by the works in Victoria Street or the accelerated Phase 3 works and undertaken during Phase 1.

 

2.     Be a local / independent Business – employ less than 250 and not part of a larger organisation or parent company.

 

3.     Sign a grant agreement that includes, but not limited to:-

 

·       That the payment is final and legally binding.

·       Agreement that any business rate arrears would be offset before any grant was paid over.

·       Confirmation that the business is not subject to any pending or active insolvency proceedings and intends to operate as a going concern for the foreseeable future.

·       Confirmation from the business that any grant award would not breach subsidy control levels (although unlikely to be relevant due to low Rateable Value levels).

·       Commitment that intending to remain open for business at the current location for the foreseeable future.

 

4.     Businesses will be required to provide their latest utility bills and also their latest bank statement to demonstrate that the business is open and actively trading to accompany their signed grant agreement.

 

The Head of Enterprise commented that most businesses would benefit, although the amount payable needed to be affordable within Council funds.  Due diligence checks would be in place to ensure the Council met the Council’s audit and finance regulations.  She remarked that the two options had been shared with the Traders group on Monday, 13 March.  The Traders were planning to meet to discuss with their network.  Council Officers had offered to then meet with the wider group to answer any questions on options and timelines.  The Council would then agree the funding allocation with legal and finance so that it was proportionate, appropriate and affordable, noting that it was taxpayers money and the Council had no legal obligation.

 

A Board Member suggested option 2 was the best choice as option 1 was effectively subjecting a company to a full audit.  He suggested potentially a business rates holiday could be something which the Council could consider.  The second thing he suggested was a contribution towards their rent.  Another potential option was for the Council to offer match level funding.  He said the Council could potentially even consider writing off any debts the businesses owed to the Council.

 

A Board Member referred to online shopping and the real impact this had on businesses in the City Centre.

 

A Board Member asked if option 2 would include businesses which started up during the period of the works.  She asked who ultimately decided which option would be used, she was aware the Traders were being asked for their views.  The Director of Communications and Visitor Experience responded it was ultimately a decision for the Cabinet Member.

 

The Cabinet Member asked for the support of Scrutiny Board for a support package.  He referred to the numerous times the Public Realm had been discussed at other Scrutiny meetings. 

 

The Vice-Chair commented the communication with the Traders had not been as it should have been from the start of the project.  Whilst the Council had acknowledged the impact of the works on the businesses, the Council had not been willing to offer an apology for the impact it had on them.  He felt an apology should have been offered.  He referred to businesses which had ceased trading and others which had left the City.  He asked if any support package would be extended to the businesses on Lichfield Street when works commenced there.  He asked for more details about who had attending the meeting the evening before. 

 

The Director of Communications and Visitor Experience stated he would ask for an update on the Lichfield Street plans from the Director of Resident Services, who had been unable to attend the meeting.  Five Members of the Traders Group had attended the meeting on the evening before and some apologies had been received.  There was also direct email contact with some of the other Traders.  They would be going direct to each business on Victoria Street about the options.

 

A Board Member referred to the impact of the cost of living on retail habits, which meant there were other considerations to take into account other than the public realm works when assessing the impact on businesses.  Other Members made reference to increased overhead costs such as lighting and heating. 

 

A Board Member commented that some Wolverhampton residents were choosing to shop in Shrewsbury, Telford and Birmingham instead.  These areas did not seem to be experiencing the problems of Wolverhampton City Centre.  She referred to the critical comments that had been made on Social media about the public realm works and the impact on businesses. 

 

Resolved: That,

 

a)    The principle of offering business support to the traders on Victoria Street be supported.

 

b)    A report be received by Scrutiny Board as to which business support option, for the businesses on Victoria Street, is finally chosen by the Council and implemented.

 

c)     The report should include details on how many traders responded as to which option they would like the Council to choose. This is to ensure that all 52 businesses are given an opportunity to respond.