John at High Street Chippy in Wath before the pandemic

The government clawed back nearly £30m in business support from South Yorkshire just weeks before reallocating money to the area and billing it as ‘extra’ support for going into tier 3.

Wentworth & Dearne MP John Healey has discovered that the four councils in the area were forced by government to return £28.4m in unspent grants allocated under the small businesses and retail, hospitality and leisure grant schemes.

Just £1.6m more was offered to South Yorkshire in October to support businesses through the tough restrictions imposed on areas placed by the government in ‘tier 3’.

Mr Healey said: “The government is giving with one hand and taking away with the other.

“Most of this supposedly new cash had been sitting in our councils’ bank accounts just weeks ago.

“It was allocated to help our businesses affected by the national lockdown. Councils struggled to spend it all because of the government’s red tape, so local businesses needing help were barred by national rules.

“The money needed to get through to businesses then, and it certainly does now. Our hospitality and leisure businesses in particular are worried they’re facing months with little or no income.

“The government put us into tier 3 and they should support our businesses through it, not send back recycled cash. South Yorkshire’s businesses deserve better. It’s an insult to all who are trying to do the right thing and follow restrictions.”

Lisa Pogson, immediate past president and board director of Barnsley and Rotherham Chamber of Commerce, and managing director of Airmaster Air Conditioning, said: “Our councils worked swiftly and diligently to get grants issued, whilst meeting criteria set by government. They also issued a number of discretionary payments to assist businesses that did not fit the criteria initially.

“Any more money that is now available needs to be offered as flexibly as possible. We need to identify and help plug some of the gaps that can help businesses survive this, so that we can all continue to employ and keep our economy moving in the best way it can.”

A total of £274m was allocated in April to prop up struggling retail and hospitality businesses in South Yorkshire but government ministers set rules.

Mr Healey wrote to Robert Jenrick, Secretary of State for Communities and Local Government, in early September, calling for councils to be able to keep the unspent money and use it flexibly to help high streets and the hundreds of businesses who had fallen between the gaps. Both Rotherham and Barnsley Councils backed his move, as did Barnsley & Rotherham Chamber of Commerce.