The scheme, which was announced yesterday (9 September) by Chief Secretary to the Treasury Steve Barclay, is designed to ‘provide a safety net’ to further protect jobs where a business is required to close, according to the Government.
However, any businesses still closed at a national level, such as night-time economy venues, will not be eligible.
To be eligible for the grant, a business must have been required to close due to local Covid-19 restrictions.
Smaller businesses, which occupy a premises with a rateable value less than £51,000 or occupy a property or part of a property subject to an annual rent or mortgage payment of less than £51,000, will receive a grant of £1,000 every three weeks they are required to close.
Any businesses over this threshold will receive £1,500.
Payments are triggered by a national decision to close businesses in a high incidence area.
Each payment will be made for a three-week lockdown period, and each new three-week lockdown period will trigger an additional payment.
Local authorities will be responsible for distributing the grants to businesses in circumstances where they are closed due to local interventions.
"These grants provide businesses with a safety net as they temporarily close their doors to help save lives in their local areas,” said Barclay.
"As local economies eventually and carefully reopen after local interventions, our plan for jobs is there waiting to help businesses get back on their feet, protect jobs and thrive in the future.”
The launch of the new scheme comes just days after hospitality venues in Bolton where ordered to close dine-in areas and offer takeaway only, following a ‘significant rise’ of Coronavirus cases in the town.
Responding to the announcement of the new scheme, UKHospitality chief executive Kate Nicholls said: "It is reassuring that the government has recognised the damage closures will cause businesses.
“The grants would cover some costs, but more detail is needed to properly assess the benefit.
“For example, in Bolton at present, venues can open as takeaways, so presumably are not being forcibly closed, making them ineligible for the grants. This cannot be right."
Nicholls also went on to address comments made by Barclay regarding the winding down of the Government's Coronavirus Job Retention Scheme (JRS).
She said: "On furlough, the Chief Secretary said three questions remain unanswered in terms of targeted support.
“Since the pandemic broke, it has become inarguably clear that hospitality is justifiably front of the queue for inclusion, and our supply chain benefits from our recovery.
“We realise, of course, that any employment support cannot be open-ended but, based on the rate of recovery of the sector thus far, we would propose a potential winding down at the end of Q1 2021, as the sector looks forward to the summer season.”
Earlier this week Labour called for a sector specific extension of the JRS, warning that a blanket withdrawal of the support at the end of October risks permanent pub and bar closures and threatens the the country's high streets and night life.