Summary: The Ombudsman will not investigate Mr X’s complaint about the Council not giving his business a Covid-19-related grant. This is because there is not enough evidence of fault by the Council.

The complaint

1. Mr X complains the Council did not give his business a small business grant, retail, hospitality and leisure grant or discretionary grant. He states this has resulted in financial difficulty for his business during the Covid-19 restrictions.

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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’. We provide a free service but must use public money carefully. We may decide not to start or continue with an investigation if we believe it is unlikely we would find fault.
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 “Principles of Good Administrative Practice during Covid.”

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How I considered this complaint

5. I considered the information Mr X provided and discussed the complaint with him. I also considered the relevant government guidance and the Council’s discretionary grant scheme. I gave Mr X the opportunity to comment on my draft decision.

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What I found

Small business grant and retail, hospitality and leisure grant

6. A business’ right to a grant depends on its rateable value on the business rating list and its eligibility for certain business rates reliefs as at 11 March 2020. Government guidance states later changes to the rating list, even if such changes are backdated to 11 March 2020, do not entitle a business to a grant. A council can make an exception if, on 11 March 2020, it already had good reason to believe the rating list was inaccurate for a particular address or business.
7. Not all businesses appear on the rating list as not all businesses have to pay business rates. The Valuation Office Agency (VOA), not the Council, compiles the rating list and decides if a business is liable for business rates and, if so, what its rateable value is.
8. Mr X has run the business in question for over ten years. I understand he did not tell the Council’s business rates department when he set up the business, as he did not realise he might need to. Mr X does not pay business rates as his business is not on the rating list. This is because the site is classed as agricultural land, which is exempt from business rates. Mr X pays drainage rates, a different type of rate that is charged on agricultural land. Drainage rates are paid to an internal drainage board, a separate organisation from the Council.
9. As Mr X’s business was not on the business rating list on 11 March 2020, it therefore could not have been eligible then for the business rates reliefs mentioned in paragraph 6. So the Council said the business did not qualify for either a small business grant or a retail, hospitality and leisure grant.
10. Mr X argues his business should appear on the business rating list rather than being treated as agricultural land. He believes if the business was on the rating list, it would qualify for the rates reliefs that entitle businesses to a grant. Mr X states it is the Council’s fault that his business is not on the rating list as the Council has known of the business’ existence for many years because the Council’s planning, environmental protection and highways sections dealt with him when he set up the business.
11. Those Council departments were involved because they had their own statutory functions to carry out, unconnected to business rates. I do not consider those departments had a duty either to tell the Council’s business rates section about Mr X’s business (if they knew the business was actually operating) or to advise Mr X about business rates matters.
12. Also, even had the Council’s business rates department learned of this business (either from another Council department or if Mr X had contacted it), the most the Council would have done would have been to tell the VOA. We do not know what the VOA might have decided about whether this business attracted business rates or about the rateable value if it did attract business rates. So we cannot assume the business would have been eligible for Covid-19-related grants.
13. For these reasons, I do not find fault on this point.

Discretionary grant

14. The government has also given the Council some funding for discretionary grants to businesses. The government guidance asks councils to prioritise four types of businesses for discretionary grants: small businesses in shared offices or flexible workspaces; regular market traders with fixed building costs; certain bed and breakfasts; and certain charity properties. Beyond that, it gives councils discretion on awarding grants, stating:

‘Where limits to funding available for this scheme require local authorities to prioritise which types of businesses will receive funding, it will be at the local authorities [sic] discretion as to which types of businesses are most relevant to their local economy. There will be no penalty for local authorities because of their use of discretion to prioritise some business types.’ (Department for Business, Energy and Industrial Strategy: Local Authority Discretionary Grants Fund – guidance for local authorities, paragraph 26)

15. The Council’s discretionary grants scheme covers the businesses the guidance says it should. It also prioritises grants to two other types of business the Council judged locally significant, which do not include Mr X’s field of business.
16. The Council told Mr X his business did not meet its criteria for a discretionary grant. It added, ‘However, should any funding remain available after the closure of the current discretionary scheme, we will be revisiting other areas that we may be able to offer help.’
17. The guidance entitled the Council to prioritise discretionary grants in the way it did. The decision in Mr X’s case was in line with its scheme. So I do not find fault with how the Council reached its decision, although I understand why Mr X disagrees with the Council. The Council’s willingness to revisit the matter if funds remain shows it has not fettered its discretion.

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Final decision

18. The Ombudsman should not investigate this complaint. This is because there is insufficient evidence the Council was at fault for not giving a grant.

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Investigator's decision on behalf of the Ombudsman