Business Secretary Alok Sharma is to examine the support being given to “short-changed” London to stop thousands of firms going bust, the Standard has been told.

Nickie Aiken, Conservative MP for the Cities of London and Westminster, met the Cabinet minister yesterday to raise concerns that swathes of the capital are being short-changed through the Additional Restrictions Grant.

It is allocated on a £20 per head of population basis. But many London boroughs have far more businesses than other parts of the country, meaning that they are being awarded far less per firm.

The most acute case is the City of London, which is getting just over £8 per business, compared with more than £1,100 in Blaenau Gwent in Wales.

Six of the 10 areas receiving the lowest payments per business are in London, including Westminster, Camden, Kensington & Chelsea, Islington and Hackney.

Ms Aiken said: “The meeting with the Business Secretary was extremely positive. He completely understood the issue with the formula for central London. He has given me assurances that he will speak to officials to see what can be done.

“He also accepts that central London and specifically the commercial activity zone has been hit very hard this year with footfall down as workers and visitors stay away which has particularly hit service industries.”

She does not expect the Additional Restrictions Grant’s formula to be changed, given that it is already being implemented, but hopes that a special fund could be set up for central London councils to distribute that would help give many small businesses a “fighting chance”.

Some 12 town hall leaders in London, including from Kensington & Chelsea, Westminster, Southwark and Camden, wrote to Mr Sharma yesterday raising their concerns that businesses in their areas are missing out in the scheme.

The Business Department stressed that firms are being supported through a variety of schemes and most areas have a correlation between population levels and the number of businesses.

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