Summary: Mr X complains the Council did not follow a proper decision making process and wrongly refused his business a grant, causing distress, financial loss and redundancies. We find fault in the Council’s decision making process causing uncertainty. We recommend the Council provides an apology, makes a payment, reviews its decision and acts to prevent recurrence.

The complaint

1. Mr X complains the Council did not follow a proper decision making process and was wrong to refuse his business a grant, causing distress, financial loss and redundancies.

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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. 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)
4. 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”.
5. 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

6. I spoke to Mr X and I reviewed documents provided by Mr X and the Council. I gave Mr X and the Council the chance to comment on a draft of this decision and I considered the comments provided.

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What I found

Grant Funding Schemes

7. In response to the COVID-19 pandemic the Government introduced two grant schemes to support businesses. In March 2020 the Department for Business, Energy and Industrial Strategy published guidance for councils on how to apply these: “Grant Funding Schemes”.
8. The schemes apply to premises occupied on 11 March 2020 and funding is payable to the ratepayer as recorded on 11 March.
9. A council should ignore any changes to the rating list (either to the rateable value or to the property) after the 11 March, including backdated changes. However, where it was factually clear to the council on 11 March that the rating list was inaccurate, councils may withhold the grant and/or award the grant based on their view of who would have been entitled to it. This is at the council’s discretion.

Small Business Grant (SB Grant)

10. Businesses which on 11 March 2020 were eligible for Small Business Rates Relief (SBRR) could receive an SB Grant of £10,000 per property provided they are not:
• occupied for personal use
• car parks or parking spaces
• in liquidation or dissolved on 11 March.
11. Gov.uk says you can get SBRR if:
• your property’s rateable value is less than £15,000 and;
• your business only uses one property. However;
1. if you use more than one property, you’ll keep getting any existing relief on your main property for 12 months after acquiring your second property and;
2. you can still get SBRR on your main property after this if none of your other properties have a rateable value above £2,899 and the total rateable value of all your properties is less than £20,000 (£28,000 in London).
12. Gov.uk also says small businesses in England which pay little or no business rates are entitled to a one-off cash grant of £10,000 from their local council.
13. You are eligible if your business:
• is based in England
• occupies property
• was eligible for small business rate relief (including tapered relief) or rural rate relief on 11 March 2020
14. You cannot get funding for:
• properties occupied for personal uses
• car parks and parking spaces
15. If you use more than one property:
• Eligible businesses can get one grant per property.
16. You cannot claim both the small business grant and the retail, hospitality and leisure grant on the same property.

Retail, Hospitality and Leisure Grant (RHL Grant)

17. If a recipient is eligible for the SB Grant they are excluded from accessing this grant.
18. A business must be eligible for the Expanded Retail Discount (the “Discount”) to qualify for the RHL grant. In April 2020 MHCLG published guidance for councils on how to apply the Discount, “Business Rates, Expanded Retail Discount 2020/21: Coronavirus Response Local Authority Guidance”.
19. Each council will adopt its own scheme and decide whether to grant the Discount, having regard to the guidance.
20. The guidance lists the types of businesses included, however says this is a guide only and it is for councils to decide if a business is broadly similar in nature to those listed and so eligible. The guidance also lists the types of businesses not included but repeats this is a guide only and it is for a council to decide if a business is broadly similar in nature to those listed. Of relevance to this case, this includes businesses that are not reasonably accessible to visiting members of the public.

Principles of good administrative practice

21. The Ombudsman publishes a guidance document setting out the standards we expect from bodies in jurisdiction. We issued an addendum in response to the COVID-19 pandemic; “Good Administrative Practice during the response to Covid-19”. The following points are relevant in this case.
• Basic record keeping is vital during crisis working. There should always be a clear audit trail of how and why decisions were made.
• The basis on which decisions are made and resources allocated, even under emergency conditions, should be open and transparent.
• Decision reasons should be clear, evidence based and where necessary explained in the particular context and circumstances of that decision.

What happened

22. Mr X owns Company X which occupies multiple properties. He applied for a grant for Property A.
23. The Council refused the grant because Property A was empty on 11 March 2020. It told Mr X to complain if he did not agree with this decision.
24. Mr X complained and provided evidence of occupation.
25. The Council accepted Property A was occupied. However, it said Mr X did not qualify for a SB Grant because Company X occupied more than one property. It referred to relevant law which says SBRR is payable to ratepayers who occupy one property with a rateable value under the threshold, or ratepayers who occupy one main property and no other property has a rateable value above £2,899 and the total rateable value of all properties is less than £20,000.
26. The Council also explained Property A did not qualify for a RHL Grant. Although Company X was one of the businesses listed as eligible for the Discount, Property A was not reasonably accessible to visiting members of the public. The property was an office alone and members of the public could not reasonably access it to buy goods and services.
27. The Council told Mr X he could ask for a review if he felt it had made a mistake. It also referred him to the Ombudsman.
28. Mr X maintained Property A was occupied and he asked the Council to review its decision on this point. He also explained Company X occupied Property A with a rateable value of £898.40 and Property B with a rateable value of £5,600. The Council had incorrectly recorded it occupied Property C, but this was let to tenants. Mr X said he would contact the business rates office about this. However, he wanted the Council to review its decision that Property A was not occupied.
29. Mr X contacted the Council again to say the Ombudsman was not currently accepting complaints due to the COVID-19 pandemic. He insisted Property A was occupied on 11 March and asked the Council to look at this again. He again said he would contact the business rates office regarding their incorrect records on Property C.
30. The Council told Mr X he would need to contact the Ombudsman. And it had passed information to the business rates team.
31. Mr X then contacted the Ombudsman. He said the Council brought up a new reason to refuse the grant; that Company X occupied Property C, and then did not let him challenge that point. He said Property A and Property B had a total rateable value under £20,000 and so Company X was eligible for SBRR and eligible for the SB grant. He says he told the Council in 2019 Property C was occupied by tenants. However, the business rates team has refused to look into the issue.
32. I asked the Council to provide a record of any contact between Mr X and the business rates team following his complaint and what the outcome was of its review.
33. In response to enquiries the Council did not provide any record of further contact. It said it did not review the decision as there was no requirement to do so when considering the legislation on SBRR. It made the following points:
• Its records showed Company X occupied properties A, B and C.
• It paid Company X an RHL Grant of £10,000 for Property B. It could have considered eligibility for an SB grant however it would have awarded the same amount of £10,000 in any event.
• It would class Property B as the main premises of Company X under any consideration of SBRR, had it not fallen under the retail element.
• Under Small Business Rates rules only one grant payment is allowed, even where additional properties fall under the required rateable value thresholds indicated in legislation.
• It initially refused a grant for Property A as it was empty, but this was a mistake.
• It has considered the SBRR legislation and grant conditions, taking all information into account for all premises. Property A does not qualify for SBRR in its own right.
• Prior to the introduction of the Grant Schemes it did not receive further information about tenants at Property C and its record remain in the name of Company X.
34. In comments on my draft decision the Council said:
• It gave general reasons for refusing the Small Business grant but recognises it should have referred to the exact issues with Property B and C.
• It denies receiving any information from Mr X about Property C prior to 11 March 2020. It did not need to consider his further information as this would not affect its decision on eligibility.
• Only the main property can qualify for SBRR and therefore in turn for a Small Business Grant. It is not correct to say a Small Business Grant is payable per property.
• Mr X has had all money he is entitled to under the government schemes and is therefore at no financial detriment. Whilst it appreciates the outcome of assessments kept changing which could have been confusing for Mr X, this is because the circumstances presented along with guidance from the government was also rapidly changing. It feels it is unfair that a Local Authority is being asked to pay compensation for administrating these schemes.
35. In comments on my draft decision, Mr X provided evidence to show he told the Council tenants occupied Property C in 2019.

Findings

36. Grants are only available to occupied businesses and so the Council was right to consider occupation in the first instance. The Council initially refused a grant on the basis Property A was empty. However, upon Mr X’s complaint it accepted Property A was occupied. I am satisfied with the Council’s action in this regard.
37. The Council then considered further eligibility criteria. I note Mr X is unhappy the Council then introduced further reasons for refusing the grant, after accepting Property A was occupied. However, I consider the Council was right to consider the eligibility criteria further, once it accepted Property A was occupied.
38. The Council refused a SB Grant because Company X was not eligible for SBRR and so not eligible for a SB Grant. It suggested one of Mr X’s additional properties had a rateable value above £2,899 and/or the total rateable value of all his properties exceeded £20,000, so it did not qualify for SBRR. However, it did not say which of these rules applied. It is also not clear what information it took into account about Property C. I therefore cannot say the Council followed a proper decision making process at that time. The lack of clear reasoning amounts to fault. This caused Mr X uncertainty.
39. The Council refused a RHL Grant for Property A with reference to relevant law and Government Guidance. It explained Property A was not reasonably accessible to visiting members of the public and so was ineligible. I am satisfied the Council followed a proper decision making process in this regard.
40. I am satisfied the Council did offer Mr X a review of its decision.
41. Mr X asked the Council to review its decision on whether Property A was occupied. I note the Council did not then review this decision, however, as it had already accepted Mr X’s point that Property A was occupied, I find a review of this was not necessary. I find no fault in this regard.
42. Mr X disputed Company X occupied Property C and wanted to challenge this with the business rates team. The Council agreed to pass this information to business rates but has since refused to consider the matter further. I consider the Council’s refusal to consider relevant information amounts to fault in its decision making process. The status of Property C could affect the Council’s decision on eligibility for SBRR and the SB Grant. Because of the Council’s fault, Mr X has suffered uncertainty as to whether he is entitled to a SB Grant. This is injustice. I cannot say the Council should provide a grant, however I can recommend it consider relevant information and make its decision again.
43. In comments on my draft decision the Council says its decision would not change upon further information from Mr X, as it did not receive this information before 11 March 2020. However, Mr X considers he has evidence to the contrary, which I find the Council should consider. The Council also says its decision would not change as only one Small Business Grant would be payable to the business in any event. However, information published on Gov.uk suggests that if a business is eligible for SBRR then it may receive one SB Grant per property it occupies. Therefore, further consideration may be necessary on this point.
44. I acknowledge the Council’s comments that it is unfair for it to pay compensation simply for administering the scheme. However, I have not recommended the Council pay compensation for changing outcomes or for administering the scheme. Rather, the reasons for the Council’s decision were unclear and it then refused to consider further relevant information from Mr X. This caused him uncertainty for which I have recommended a payment and action to remedy.

Agreed action

45. To remedy the injustice set out above I recommend the Council carry out the following actions:
46. Within one month:
• Provide Mr X with a written apology for the fault identified above;
• Pay Mr X £100 for uncertainty;
• Allow Mr X to provide further information about Property C and;
• After considering any further information, write to Mr X to say whether Company X is entitled to a SB Grant of £10,000 per property, give reasons for the decision with reference to relevant law and policy and, award a grant if eligible.
47. Within three months:
• Remind staff of the need to provide clear reasons in support of any decision.
48. The Council has accepted my recommendations.

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Final decision

49. I find fault in the Council’s decision making process causing Mr X uncertainty. The Council has accepted my recommendations and I have completed my investigation.

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Investigator's decision on behalf of the Ombudsman