Barnsley has received £47m to support businesses through three grant schemes set up by the government to counteract the effects of the pandemic.
In April, it was announced small businesses with little or no business rates could receive one-off grants of £10,000 through the Small Business Grant Fund, while the Retail, Hospitality and Leisure Grant Fund covered businesses with one-off grants of up to £25,000.
Other small and micro businesses not eligible for other funding sources could apply for cash through the Local Authority Discretionary Fund.
The funding, distributed in the borough by Barnsley Council, was designed to keep businesses moving through the pandemic.
But as the furlough scheme winds down and more people return to work, Wentworth and Dearne MP John Healey said there was still ‘huge pressure’ on businesses - as the government calls for the underspend to be returned to the treasury.
John said: “Our local shops and restaurants are still under huge pressure.
“Now is the time for the government to let us help them, not take the money back to London.
“Local communities should be allowed to keep this funding and use it flexibly to support our high streets and save jobs.
“This would free up a significant amount of money that could be targeted where we know it’s still desperately needed.”
In a letter to Secretary of State Robert Jenrick MP, John said the underspend should go towards a ‘fightback fund’ which would help businesses through current low levels of footfall and trading.
While thousands have benefited from the schemes, he said 160 firms in Barnsley weren’t able to get a grant due to not meeting the ‘rigid’ criteria.
The remaining fund would be able to support hundreds more businesses - with the proposal having the backing of local authorities and the Barnsley and Rotherham Chamber of Commerce.
Andrew Denniff, chief executive of the chamber, told the Chronicle: “The big question is what happens now - If the money was meant for local businesses, why hasn’t it been distributed?
“The reason local authorities were given the money was to support businesses through Covid, and Barnsley and Rotherham were very quick off the mark compared to other local authorities.
“Businesses had to tick a lot of boxes, and quite a number didn’t qualify in the first place and haven’t received a penny.
“It’s an opportunity to reinvest this money and ask local businesses to reapply, and be more flexible in trying to support as many businesses as we can.
“It won’t take much to take us back to a critical level and end up facing another lockdown - and there are still a lot of businesses that need support.”
More than 35,000 workers in Barnsley have been supported by the Job Retention Scheme (JRS), which finishes next month.
There have been calls for both the JRS and the Self-Employment Income Support Scheme - which has helped 9,000 individuals in Barnsley with more than £25m in grants - to be extended past their planned end date.