Struggling businesses in Cornwall may only get half the grant cash they're entitled to after demand outstrips the money available.

This is the warning from Cornwall Council, which has seen a surge of applications for the latest Additional Restrictions Grant (ARG) scheme that has outstripped available funds by more than £14.5 million.

It has prompted council leaders to write to chancellor Rishi Sunak urging the government to provide more money.

The council has warned: "This shortfall means that unless more money is freed up by government, Cornwall Council will be unable to pay each business more than 50 per cent of the money they’ve asked for."

aimed at businesses which have been forced to close or limit trading during the current coronavirus lockdown.  

Cornwall was allocated £11.5m by the Government for the ARG scheme, which was designed to support businesses who are not eligible for other forms of financial support and have fixed ongoing costs such as rent or mortgage payments, loans or lease agreements for capital equipment or rental of workspaces.    

Eligible businesses were those that had not previously received any form of coronavirus grant support, had been legally required to close and were not business rate registered, or had been severely impacted by the third lockdown but were ineligible for the Local Restrictions Support Grant because they have not been mandated to close.

Cornwall Council cabinet member for the economy Tim Dwelly, said: “Throughout the pandemic we’ve worked hard to get grant money to businesses that need it as quickly as possible – indeed, the government praised us for doing just that.

“But now we’re in the position of having to make incredibly difficult decisions about how we deliver these grants, because there simply isn’t enough money to go around.

“That’s why we’re urging the chancellor to free up more funds to support businesses here in Cornwall. This can’t wait. He needs to take action now if we’re to prevent an already critical situation from getting worse.”

The letter calls for an additional £20.3m in discretionary grant funding, an extension of VAT reduction, deferral of tax payments and loan repayments, and an extension of the furlough scheme beyond April 2021.

It says that while Cornwall has put “successive rounds of Covid-19 funding to good use” it was clear that, based on demand, Cornwall needed additional discretionary funding to ensure a strong recovery of it economy.

“We want to ensure that by June 2021, when the G7 is hosted in Carbis Bay, the government can showcase Cornwall as an example of a local economy that is growing back better following the Covid-19 crisis," adds the letter.