South Yorkshire shopkeeper faces ruin after £15,000 Covid grant clawback demand

Richard Lawson received £25,000 and says he spent it on clearing debts, paying creditors, buying stock and ensuring staff received 100 per cent of wages.

The cash was for his business, Entertainment Station, on Rotherham High Street, and was enough to ‘weather the storm for at least eight weeks’ after closing due to lockdown, he said.

But on May 1 the authority emailed asking for £15,000, stating he had been overpaid and should only have received £10,000.

An investigation appears to show the government changed the rules, so that his business fell into the lower bracket, AFTER he received the money.

He said: “If I had received the lower grant payment of £10,000, I would have conducted my business affairs very differently and we would have had to continue to trade online in order to generate extra income.

“However, we did not, and my company has done everything that the Government has asked us to do. We have cut out non-essential travel, we are not placing any burden on the Royal Mail, we are staying at home, we are protecting the NHS, we are saving lives.

“Since the payment was received, and with no perceived risk to our financial position as we did not expect to have to pay it back, we closed our doors, as the Government required. I furloughed my staff. We ceased all trading, even online trading. This was safe in the knowledge that with the grant we received, we could weather the storm for at least eight weeks.”

Entertainment Station has a rateable value of £15,000.

Mr Lawson’s investigations appear to show that on April 6 the government stated it paid £25,000 grants to businesses with a rateable value of between £15,000 and £51,000, which included Entertainment Station.

But at some point after April 6, and after he’d received his grant, it changed to say more than £15,000 - excluding him by a penny.

Mr Lawson claims a contract was formed at the point of payment and it is unlawful to change it afterwards.

He added: “All of this based on a 1p rateable value and puts our business at risk of closing its doors, laying off three members of staff and filing for bankruptcy.”

Judith Badger, Rotherham Council’s strategic director of finance and customer services, blamed human error but insisted the £15,000 had to be recovered.

She added: “The council prioritised the fast payment of grants to businesses because we know they are a lifeline to many firms. In just a few weeks we’ve processed payments worth in excess of £36 million to over 3,100 businesses.

“The payments are checked and audited to ensure the right amounts are paid to the right businesses, in accordance with the Government’s criteria.

“Inevitably, when processing this volume of applications, human errors will be made which show up later in our auditing process. While these errors are few and far between, when this does happen, we have a duty to rectify them – sometimes this can mean the payment of additional grant to the businesses and in others it means we will have to recoup overpayments.

“We will work with any business that we ask to repay grant paid incorrectly to try and ensure the repayment arrangements are not damaging to their business.”

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