Summary: The Council was at fault for providing inaccurate information about eligibility for a business grant. The Council has now agreed to pay Mr X £500 for the direct injustice caused. That is an appropriate remedy, so the Ombudsman will not pursue the complaint further. Other parts of the complaint are more appropriately for the courts.

The complaint

1. Mr X complains that inaccurate information on the Council’s website led him to believe his business would receive a grant. He states this resulted in him making a wasted application and it adversely affected his business.

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The Ombudsman’s role and powers

2. We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word fault to refer to these. We must also consider whether any fault has had an adverse impact on the person making the complaint. I refer to this as ‘injustice’. If there has been fault which has caused an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
3. This complaint involves events that occurred during the Covid-19 pandemic. The Government introduced a range of new and frequently updated rules and guidance during this time. We can consider whether the Council followed the relevant legislation, guidance and our published “Principles of Good Administrative Practice during Covid”.
4. The law says we cannot normally investigate a complaint when someone could take the matter to court. However, we may decide to investigate if we consider it would be unreasonable to expect the person to go to court. (Local Government Act 1974, section 26(6)(c), as amended)

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How I considered this complaint

5. I considered the information Mr X provided, including correspondence between him and the Council. I also considered government guidance about the relevant grant scheme. I gave Mr X the opportunity to comment on my draft decision.

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What I found

6. In March 2020, the government created schemes for councils to pay grants to some retail businesses. This was because the Covid-19 restrictions affected so many of those businesses. Not all businesses are eligible.
7. Mr X has a retail business. The Council accepts its website inaccurately described eligibility for the grant, wrongly implying businesses such as Mr X’s were just within the eligibility criteria. In fact, such businesses were not eligible.
8. Mr X, after seeing the information on the Council’s website, believed his business was eligible for a grant of £25,000. He applied for a grant in late March 2020, just after the Covid-19 restrictions took effect. Around four weeks later, the Council refused the application as the business was not eligible.

The Council’s fault and its direct effects

9. I agree the Council was at fault for the inaccurate information on its website. The Council’s website also contained a link to a central government website about the grants scheme. The Council suggested Mr X should have followed the link and checked both websites to make sure he was eligible. I am not persuaded by that. I consider Mr X reasonably believed the Council’s website and acted accordingly.
10. Had the Council’s website been accurate, on balance I consider it likely Mr X would have realised his business was not eligible and would not have applied for the grant. So the Council’s fault caused Mr X some avoidable wasted effort, disappointed expectation and distress. Mr X also went to some time and trouble pursuing the matter. Those injustices directly resulted from the Council’s fault. Before Mr X came to the Ombudsman, the Council apologised and corrected its website. I welcome that, but I consider a further remedy is warranted.

Mr X’s argument about further impact on his business

11. As well as the direct impact I have described above, Mr X also says if he had known he could not get the grant, he would have furloughed staff and suspended the business at the outset. Instead, believing he would get the grant, Mr X states he decided to keep the business open and try to keep operating. He says staying open was very difficult and stressful. He wants the Council to pay the £25,000 it would have paid if his business had qualified for the grant.
12. Essentially, Mr X is arguing the Council is liable for consequential or economic loss to his business because the business stayed open. The courts can decide such matters, so the restriction in paragraph 4 applies to this part of the complaint. Liability for consequential or economic loss is not a straightforward matter legally. It is more appropriate for the courts than the Ombudsman to decide such points.
13. As Mr X’s business did not qualify for the £25,000 grant, I also consider it would be disproportionate and inappropriate to ask the Council to pay Mr X that amount.
14. For these reasons, I shall not pursue this part of the complaint further.

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Agreed action

15. At my recommendation, the Council has now also agreed to pay Mr X £500 to recognise that its faults caused the injustice described in paragraph 10. I recommend the Council pays this within two months of the Ombudsman reaching a final decision on this complaint.
16. This amount is somewhat higher than the Ombudsman usually recommends for such injustice. However, I consider it justified in the circumstances, especially as the impact described in paragraph 10 was heightened because it came at a difficult and uncertain time for Mr X’s business due to the Covid-19 situation.

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Final decision

17. The Ombudsman need not pursue this complaint further because the agreed action described above will appropriately remedy Mr X’s injustice.

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Investigator's decision on behalf of the Ombudsman