NEW business should not be given false hope when it comes to financial support, a council leader has warned.

During Tuesday evening’s first meeting of the Colchester Council scrutiny panel, the newly elected Conservative Simon Crow called on the ruling alliance to use some of an £800,000 pot to ease the financial pressure on new businesses.

the council’s extra £800,000 received through business rates.

He suggested the money be used to create a discount scheme to ease financial pressure for new businesses.

The authority collects business rates on behalf of central Government and is given about £800,000 for doing so.

But council leader Mark Cory (Lib Dem) told the meeting it would not be fair to promise firms a share of the cash as it is not a reliable income.

Mr Crow quizzed the leader: “Every week we are hearing about the pressures faced around high street retailers.

“Around Colchester new businesses seem to disappear as fast as they appear. When you run a small business, cash is key.

“As a council, do we have a duty to create an environment where a new business has the best chance of succeeding?”

Mr Cory said there were other ways the council was supporting businesses, which are doing well in the town, and the council has a positive and proactive relationship with them.

He said: “The problem with that money is we can’t predict how much will come in each year. It’s really to be used in a one-off sense.

“It’s an interesting proposal and we are being more supportive as things are getting more difficult. We are doing as much as we can in a reactive sense.

“We will look at how we can use that money coming in but we do give out £75,000 in business support grants to help small and new businesses grow. We also offer business rate relief which is positive.

“I would just want to be careful how we use that money which is not guaranteed as regular income.”

Mr Cory did suggest using the cash for join- funded projects if the BID proposal is approved. He added the council would be keen to work with BID businesses and potentially match funding from the BID money pot for projects around the town.

In terms of the council’s overall financial position, there was an underspend of £79,000.