The Cornwall councillor responsible for the economy says that 3,500 businesses could be at risk after the Government made the “devastating” decision to order the council to return money which it hoped to use to provide grants.

Cornwall Council has been distributing grants from the Government to businesses to help them during the coronavirus pandemic and lockdown.

After the initial round of grant funding was announced it was shown that the criteria set by the Government for which businesses could apply had meant that many small businesses and those which are self-employed were unable to apply.

As a result the Government provided £13.5 million of funding which could be given as discretionary grants by the council.

However the council said that there were far more businesses in Cornwall which were eligible for grants than the funding would allow and as a result asked if it could use money which was left over from the other grants to plug the gap.

The council said it would need an extra £27m to help all those which had applied and was hoping the Government would allow it to use the money which had already been provided to the council.

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However Tim Dwelly, Cabinet member for economy, said that the Government has asked all councils to pay back any unspent money.