The government has unveiled its latest attempt to resuscitate small businesses on the brink of going bust.

The ‘top-up’ business grant funds scheme, announced on Friday, is an expansion of the existing Small Business Grant Fund, criticised in some quarters for its limited scope, leaving many smaller businesses unable to claim.

The business secretary Alok Sharma has spoken to local authorities in England, who now have an extra £617 million to pump liquidity into some of their smallest businesses.

The money will be available for businesses with under 50 employees, and they must be able to demonstrate a significant drop in income due to the coronavirus lockdown. Councils have the discretion to allocate the money to meet local need.

It is thought the new fund will particularly benefit small start-ups, often with shared premises, that were previously outside the scope of government grants.

The new initiative was in part led by Hitchin & Harpenden MP, Bim Afolami, who worked with the Ministry for Housing, Communities and Local Government and the Treasury to ensure that councils across the country have the flexibility to support more local businesses

Bim said: “Over the past month I have been contacted by constituents with businesses in a whole range of industries who have not thus far been covered by many of the government’s extensive financial support packages.

“I thought of a way in which councils could meet this gap and I’ve worked very hard with government ministers to make this a reality. This is an example of the difference that having a Conservative MP can make, working closely with a Conservative Government.”

NHDC councillor Ian Albert added: “Keith Hoskins and I, from the NHDC joint administration, had a very productive video meeting with Bim Afolami a fortnight ago. We raised with him that there are a number of North Herts businesses needing help, which were falling through the cracks.

“We pointed out that we may have an underspend from the grant money given to us by Government. If councils could keep this money, we could set up a local scheme, to help even more businesses. It’s great Bim took this idea away and was able to persuade Government to take it on board.

“We broadly welcome the new support package, although it is looking at risk of being rather complicated to administer and rather too heavy with restrictions, in a way perhaps a locally developed scheme might have avoided.

Cllr Albert said it was “disappointing” that in these challenging times Bim “chose not to highlight and demonstrate the huge value of cross-party working.”

He added: “As an administration, we’ll keep on trying to work closely with our elected MPs, to help the residents of North Hertfordshire. That will not change.”

The ‘top-up’ grant fund follows last week’s announcement of the Bounce Back Loan Scheme, which now gives businesses the chance to apply for loans between £2,000 and £50,000, interest free for the first 12 months.

Further information on the new ‘top-up’ fund will be made available to councils in the coming days.