Steve (from Sidmouth) states that Sidmouth can't get funding because its run as business. How is "run as a business" defined?

Sidmouth is a structured as a company limited by guarantee (not by shares) and is therefore non-profit making. The running of the festival is contracted out to Mrs Casey Music. This arrangement is very common in the arts so I don't see how it can exclude funding. If there was good financial reasons to change it I'm sure Steve would do! Am I missing something?

Then there is The Freinds of Sidmouth Festival who are are registered charity...