Tier three communities in the North set to miss out on millions in the run-up to Christmas, says Labour

According to the party's analysis, the weekly value of the crucial Additional Restrictions Grant (ARG) is set to fall by millions between the end of national lockdown and Christmas.

Local authorities in the highest restrictions – predominantly in the North of England and Midlands – set to miss out include Lancashire and Greater Manchester.

Shadow Chancellor Anneliese Dodds is warning that tier three communities will be “stretched to breaking point” after the Government refused to renew the one-off fund, which was paid to local areas either when they entered tier three restrictions or the later national lockdown.

Parts of the North West will be hit particularly hard after entering tier three weeks before the national lockdown.

By Christmas, some areas may have had to make their funding last for nine weeks, compared to four weeks in an area like the Isle of Wight.

Tier 1 areas received the same £20-per-head ARG package - for just 28 days of national lockdown - as areas now facing weeks in tier three, where many businesses are forced to close or will see takings severely hit.

Labour says that while some specific grants have been made available for firms legally required to close and certain hospitality businesses, the discretionary ARG funding has been a lifeline for tier three councils to support the many other firms badly affected by coronavirus.

Without additional funding, and with swathes of the Midlands and North set to move into tier three after lockdown, Dodds will say that “a gulf in support” is opening up across the country.

Dodds was due to describe the regional discrepancy as “fundamentally unfair” at Labour North West’s online regional conference, Connected North West, this afternoon.

She is repeating Labour’s call for the ARG fund to be extended for tier three areas, and for support to be paid retrospectively to areas which spent weeks in tier three without additional support prior to national lockdown.

She will say: “It is completely irresponsible for the government to leave tier three areas in the lurch like this again.

“The run-up to Christmas is a critical period, and local authorities are going to be stretched to breaking point trying to help.

“The government’s approach is fundamentally unfair and risks a gulf in support opening up across the country. The Chancellor must make the responsible choice and come forward with a clear system of business support for the hardest-hit areas.”

Under the ARG a one-off payment of £20 per head of population was originally given only to those parts of the country in tier three, acknowledging the fact that businesses in areas subject to tougher restrictions would need additional support.

When the whole country went into lockdown, ARG funding was then given to every local authority. The Government described the grant as ‘a one-off lump sum payment amounting to £20 per head in each eligible Local Authority when LCAL 3 [tier three] or widespread national restrictions are imposed.

Local authorities can use this funding for business support activities. But now, as England returns to the tiered system of restrictions, there is no renewal of the support available – even though many parts of the country will be in tier three.

Tier three areas will therefore have to stretch their one-off ARG funding further the longer they remain in the highest restrictions, the value diminishing with every week that passes.

Labour says that between now and Christmas, some areas will see the weekly value of that support fall by millions.