Coronavirus: Royal Docks gym owner warns businesses are at risk of ‘falling through cracks’ in government support scheme
- Credit: Archant
A gym owner has warned companies renting premises will “fall through the cracks” of a government scheme meant to support businesses closed by the coronavirus pandemic.
Diesel Gym in Dockside Road, Royal Docks, shut its doors along with businesses across the UK when the country went into lockdown last month.
In response the government announced a multibillion pound package of support for small firms including those in the retail, hospitality and leisure sector.
Two pots of funding were set up with councils responsible for paying grants to struggling businesses that qualify for help and claiming the money back from government.
Under the scheme, eligible businesses with a property that has a rateable value of more than £15,000 and less than £51,000 can each receive grants of £25,000.
Businesses with a rateable value of £51,000 or more are not eligible and those which are not ratepayers in the business rates system are not included.
In need of support, Diesel Gym’s owner, Cliff Bura, sought help from Newham Council through its back office support firm oneSource on March 26.
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However, Cliff’s non-profit organisation does not pay rates directly to the government, so it does not qualify for the support even though it otherwise fits the eligibility criteria.
Cliff rents his premises at the London Regatta Centre from landlord Royal Docks Adventure and pays Diesel Gym’s business rates contribution through the rent.
He now has to find £5,000 per month to rent premises which can’t be used, on top of about £10,000 fixed costs.
Cliff, 49, can claim 80 per cent of the nominal £6,000 salary he pays himself, but that isn’t expected to become available until June or July.
Diesel Gym now relies on its remaining 100 members continuing to pay their £50 to £95 monthly subscriptions, but that lifeline could be threatened if their livelihoods take a hit too.
“We don’t know how long we could last. Our competitors fly the flag for Newham and the UK. If we don’t see an end to this, it’s going to be a loss,” Cliff said.
A fresh lease agreement on a newly built base completed in January could have seen a rateable value applied, but delays now mean it is too late to have an impact.
“This story is bigger than the gym. A lot of companies nationwide are falling through the cracks,” Cliff said.
And he fears Diesel Gym, set up about 12 years ago and sharing its facilities with up to 20 freelance contractors, could be closed for months more.
That would have a knock effect on the community with the gym having provided free anti-bullying courses for under 16s, support for people with mental health challenges and membership of a pan-Newham anti-knife crime project.
Cliff called on the government to provide councils with the money to support businesses in the same situation as his and for town halls to lobby Whitehall to step up.
A Newham Council spokeswoman said: “Newham Council appreciates the predicament of small businesses in multi tenanted properties who are not eligible to receive government business rate relief or business grants which are administered by the local authority.
“The council is urgently raising this issue with government through our regular liaison meetings with the Department of Business, Energy and Industrial Strategy.
“We are pressing for an early response from government and are willing to work with them to unblock the flow of support which is required.”
In a further bid to highlight the problem, Cliff contacted Newham councillors and East Ham MP Stephen Timms who has raised the issue with chancellor Rishi Sunak.
Mr Timms said: “Diesel Gym pays rates like any other business, but it pays them via its landlord. This technicality debars them from the government scheme.
“That makes no sense, so I have written to the chancellor asking him to change the rules. It needs to be resolved urgently.”
Diesel Gym is running free online classes during the pandemic. Email email@example.com for details.