South Kesteven District Council: Customising COVID-19 ARG funding to support business growth, diversification & resilience

South Kesteven District Council allocated £1.2m of it’s Central Government ARG COVID-19 Grant Allocation to create a grant scheme based around supporting new and existing businesses to diversify and enable them to be more resilient in the future.


South Kesteven District Council allocated £1.2m of it’s Central Government ARG COVID-19 Grant Allocation to create a grant scheme based around supporting new and existing businesses to diversify and enable them to be more resilient in the future. The fund known locally as The Diversification, Resilience and Recovery Scheme enabled 165  businesses in South Kesteven to benefit from match funding to enable business benefits to be gained from their investment.

The challenge 

Supporting and assisting businesses during and after the pandemic has fallen greatly upon Local Authorities, with the majority of this support targeting micro and SME businesses in the retail, leisure and hospitality sectors.  Like many authorities there was a relatively small (although very effective) existing relationship with businesses that has been hugely multiplied through leading on the grants administration process. This has provided us access to  greater business intelligence to help us create these schemes to meet the real needs of businesses.

Many businesses had obviously had reserves hit by the pandemic which has meant that their ability to invest in projects to gain business benefit has often been limited. Many businesses could see actions & projects that could diversify or strengthen their business but were often unable to fully finance them.

The solution

By developing The Diversification, Resilience & Recovery Grants South Kesteven District Council enabled new and existing businesses to deliver a wide ranging selection of initiatives that enabled businesses to develop new revenue streams from new markets, and identify higher productivity & profits. All initiatives delivered through the scheme targeted job creation and safeguarding.

The impact 

The grant scheme has brought considerable positive comment from businesses who have universally been appreciative of the growth opportunities that the grant schemes enabled. The detailed business knowledge of officers was an important lesson in the process and understanding the business community enable the schemes to be constructed and administered to provide the most impactful support to meet genuine business need.

There were a very wide range of successful and diverse initiatives which were assisted by the grants. These include an engineering business who previously had no powder coating facility and were forced to outsource often with unreliable results. A grant of £12500 combined with their contribution of £22700 has enabled them to install and run their own internal powder coating plant, creating new jobs as well as helping support existing jobs by increased profits and a new revenue stream.

A new wedding and event photographer was badly affected by the pandemic and was able to use a grant of £9100 matched by the business to open a studio in order to open up a specialist portrait and product photography market which was previously not available to her, resulting very quickly in a doubling of sales.

A retail business moved to new better located premises that were larger than existing. A match funded grant £3300 enabled new shop fittings to extend the product ranges offered as well as computerising stock control to offer online sales which were not previously available. The move has almost doubled sales and created new staff positions through the growth.

A food producer has invested with a grant of £12500 backed with the business contribution of £14000 in new machinery which has enabled some products to be produced and baked over five times faster than previously, ensuring a massive productivity gain and enabling them to remove previous production limits that were preventing growth. A new sales position has resulted due to the increased capacity.

These kind of initiatives supported are bringing very measurable and identifiable long term benefits to those businesses which will strongly impact their growth.

How is the new approach being sustained?

Linking some further support to the grants enables long term measurement and monitoring of the initiatives along with the ability to further support and signpost the businesses to wider support available in order to strengthen them in the future. This additional  support is delivered proactively and effectively. We have been able to assist with helping to focus businesses on the projects that have been grant supported and help ensure that they are effective.  Where this may not be the case we are able to introduce further support and link up with other organisations and businesses to further assist.

Lessons learned

Many businesses required financial assistance in order to be able to confidently use their reserves for growth initiatives. The grant process enabled a business to focus clearly on the strategy and benefits in order to apply and this has proven a great benefit to many businesses.

The huge expansion of the number of businesses engaged enabled the council to clearly illustrate further benefits that are able to be provided going forward and has led to a far greater two way engagement with businesses and the business community culminating in a far greater relationship.

Longer term this allows the authority to develop a really strong set of connections with growing businesses and be first port of call for business support with a strong credibility.

Practical knowledge of how effective these grants were to business has enabled us to more effectively structure future initiatives as further support funds such as the UK Shared Prosperity Fund come to fruition