Summary: Mrs X complained about a lack of financial support from the Council during the COVID-19 pandemic. The Council was at fault for not addressing her complaint about the discretionary grant paid. It should apologise and review its complaints process.

The complaint

1. Mrs X complained about a lack of financial support from the Council during the COVID-19 pandemic and, in particular, that the Council:
1. did not allow her to make an application to the Small Business Grant scheme;
2. did not provide support by way of rent freezes and rent reductions;
3. only paid her a modest amount from its discretionary scheme;
4. did not respond to 39 emails raising questions about support for market traders; and
5. did not respond to all aspects of her complaint.
2. As a result of the lack of financial support, Mrs X said her business ceased to trade in late July 2020.

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The Ombudsman’s role and powers

3. 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)
4. We cannot question whether a council’s decision is right or wrong simply because the complainant disagrees with it. We must consider whether there was fault in the way the decision was reached. (Local Government Act 1974, section 34(3), as amended)
5. 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 “Good Administrative Practice during the response to Covid-19”.
6. If we are satisfied with a council’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)

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How I considered this complaint

7. I considered:
• the information provided by Mrs X and the Council; and
• relevant law and guidance, as set out below.
8. Mrs X and the Council had an opportunity to comment on two draft decisions and I considered their comments before making a final decision.

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What I found

Relevant law and guidance

Grant funding schemes

9. In response to the coronavirus pandemic the Government introduced two grant schemes to support businesses. The Department for Business, Energy and Industrial Strategy published guidance for councils on how to apply these: “Grant Funding Schemes” (March 2020). Funding is payable to the person recorded as the ratepayer in respect of the business on 11 March 2020.

Small Business Grant

10. Businesses which, on 11 March 2020, received Small Business Rates Relief (SBRR) or Rural rates Relief (RRR) may be eligible for a payment of £10,000.

Discretionary grants

11. In May 2020, the government gave councils funding for discretionary grants for businesses who did not qualify for the two grant schemes mentioned above. It published guidance, which gave councils wide discretion to set up a discretionary scheme to meet local needs. (Department for Business, Energy and Industrial Strategy: Local Authority Discretionary Grants Fund – guidance for local authorities)
12. The guidance said the discretionary grants were aimed at:
• small and micro businesses;
• businesses with relatively high fixed property costs;
• businesses that had suffered a significant fall in income due to COVID-19 and
• businesses that occupied a property with a rateable value of under £51,000.
13. The Government said as a guide, the following types of business should be a priority for funding:
• small businesses in shared offices or other flexible workspaces; examples could include units in industrial parks, science parks and incubators which do not have their own business rates assessment;
• regular market traders with fixed building costs, such as rent, who do not have their own business rates assessment
• Bed and Breakfasts which pay Council Tax instead of business rates; and
• certain charity properties.

This Council’s discretionary grants scheme

14. In line with the government guidance, this Council prioritised the following:
• Small businesses in shared officers or other flexible workspaces;
• Regular market traders with fixed building costs, such as rent, who do not have their own business rates assessment;
• Bed and Breakfasts which pay Council Tax instead of business rates; and
• Charity properties in receipt of charitable business rates relief which would otherwise have been eligible for Small Business Rates Relief (SBRR) or Rural Rate Relief (RRR).
15. To be eligible to apply, the scheme said the business must:
• Have been trading on 11 March 2020;
• Be small, with fewer than 50 employees;
• Have relatively high ongoing fixed property-related costs; and
• Be able to demonstrate that they have had a significant drop of income due to Coronavirus restriction measures.
16. The scheme set out how it would calculate the amount of the grant, which depended on the type of business and the amount of their fixed property-related costs. For market traders with a daily licence, which do not fall within the government guidance as they do not have fixed property costs, the Council will award the equivalent of three months’ rent. The scheme set out the evidence all applicants would need to provide.

Analysis and findings

Small business grant

17. Mrs X was a market trader with a daily licence. She did not have a separate assessment for business rates and did not qualify for SBRR or RRR. This meant she was not eligible for a small business grant under the Government scheme. Therefore, the Council was not at fault for not considering an application from her.

Rent freezes and rent reductions

18. The Council wrote to all market traders in late March offering a rent freeze for two months whilst the market was closed due to the COVID-19 pandemic. It signposted them to information about available support.
19. A further rent free period was agreed until the end of June for those traders who were able to trade from 15 June 2020, and to 18 July for those traders not able to fully open until 4 July 2020. Therefore, market traders did not have to pay rent for the periods where they were not able to trade.
20. The Council wrote to market traders in mid August 2020 to explain why it could not consider further rent concessions. It said it had provided a support package worth £1.7 million and could not, due to the loss of substantial income itself, offer any further support.
21. Whether to allow a rent free period or to reduce the rent were commercial decisions for the Council to make. I am satisfied the Council properly considered providing financial support for its market traders and appropriately communicated with them about this. Since there is no fault in the way the Council considered this, I cannot comment on the decisions it reached.

Discretionary grant

22. Mrs X applied for a discretionary grant on 1 June 2020 and provided the evidence the Council asked for. The Council considered the application and agreed to award her £1,386.20, which was equivalent to three months’ rent. This was in line with its discretionary scheme. The Council was not at fault.
23. The Council processed the grant for payment on 12 June 2020 so there was no delay in agreeing or paying the grant.
24. The discretionary scheme did not provide for a right of appeal where an applicant was unhappy with the outcome. We would usually expect that if there is no right of review or appeal, councils will check there was no error in the decision-making process as part of its complaint response. I will consider the complaint process below.

Complaints process

25. Mrs X sent multiple emails setting out her complaints. Some of those related to general concerns about the Council’s lack of support for the market, which the Council addressed by emails to her and general communications to market traders. Whilst I note Mrs X remains unhappy with the Council’s response, I am satisfied it has addressed the general concerns she raised.
26. Mrs X also set out concerns relating to her own situation, including what she saw as a “paltry” discretionary grant. As mentioned, the Council’s discretionary scheme did not provide a right of review. The Council did not respond to this part of her complaint in its complaint response. The failure to do so was fault.
27. Following my first draft decision, the Council provided further evidence, which shows Mrs X was aware of how the discretionary grant would be calculated, and that an officer visited her to discuss her concerns about it, including her concern about the slight delay in payment reaching her account, which was not due to fault by the Council. In light of this, I am satisfied that relevant information was provided for Mrs X to understand how the discretionary grant was calculated. Therefore, although this was not addressed formally through the complaints process, this did not cause her a significant injustice.
28. Otherwise, I am satisfied the Council responded to the key points of the complaint and the fact that it did not respond to each and every email, many of which repeated the same information, was not fault.

Agreed action

29. The Council will, within one month of the date of the final decision, apologise to Mrs X for not addressing her concern about the amount of the discretionary grant as part of its complaints process.
30. The Council will, within three months of the date of the final decision, review its approach to complaints about such decisions to ensure that in future if someone complains about a grant decision, it reviews the application to check there was no fault in the way the decision was made and, if the original decision is upheld, explains its reasons.

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Final decision

31. I have completed my investigation. I have found fault leading to personal injustice. I have recommended action to remedy the injustice and prevent recurrence of the fault.

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Investigator's decision on behalf of the Ombudsman