Summary: The Ombudsman will not investigate Mrs X’s complaint about a business grant and business rates. There is not enough evidence the Council was at fault.

The complaint

1. Mrs X complains the Council did not award her business a retail, hospitality and leisure grant and treated her property as empty rather than occupied. Mrs X states this compounded her business’ financial difficulties and led to her giving up the property.

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The Ombudsman’s role and powers

2. We investigate complaints of injustice caused by ‘maladministration’ and ‘service failure’. I have used the word ‘fault’ to refer to these. 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)
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”.

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How I considered this complaint

4. I discussed the complaint with Mrs X and considered the information she provided, copy correspondence the Council sent me and the relevant government guidance. I shared my draft decision with Mrs X and considered her comments on it.

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What I found

The Council not awarding a retail, hospitality and leisure grant

5. In March 2020, the government created schemes for councils to pay grants to small businesses and retail, hospitality and leisure businesses. This was because the Covid-19 restrictions affected so many of them.
6. A business’ right to a retail, hospitality and leisure grant depends on various factors as they existed on 11 March 2020. The business must have a rateable value less than £51,000 (Mrs X’s property did) and must have qualified for the government’s expanded retail discount scheme (ERDS) had the ERDS existed at 11 March 2020. Businesses qualifying for the ERDS are:
• ‘…occupied hereditaments that are wholly or mainly being used…’ as shops, cafes, and other retail, hospitality and leisure venues

and

• ‘…are being used…’ for the sale of food and drink or goods or services ‘…to visiting members of the public’. (Ministry of Housing, Communities and Local Government, Expanded Retail Discount 2020/21: Coronavirus Response – Local Authority Guidance, paragraphs 10 – 11)
2. Government guidance states later changes to the rating list, even if they 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. This is only intended to prevent ‘manifest errors,’ such as the rating list wrongly identifying the property or rateable value. (Department for Business, Energy and Industrial Strategy, Small Business Grant Fund and Retail, Hospitality and Leisure Grant Fund: Guidance for Local Authorities, paragraphs 42-43 and Grant Funding Schemes – Technical Frequently Asked Questions (FAQ) for Local Authorities, paragraph 28)
3. If a business property such as Mrs X’s is empty, it gets ‘empty property relief’ for three months. After that period, an empty property must pay rates again.
4. The Council states Mrs X’s business does not qualify for a grant. Mrs X had run a café. In December 2019 she told the Council she had closed the café. So the Council treated the property as empty and awarded the three-month relief period, with rates being due again from 16 March.
5. For decisions about retail, hospitality and leisure grants, the key is the situation on 11 March 2020. On that date, the Council was still treating the property as empty, with several more days of the three-month relief period left. Mrs X does not argue the property was actually ‘being used’ for the purposes in paragraph 6 above on 11 March. Nor have I seen any evidence the Council had reason to believe, on 11 March, that the property was ‘occupied’ and ‘being used’ for the sale of relevant goods or services to visiting members of the public.
6. Mrs X states during the three-month relief period the Council advised her that if, after three months, she did not reopen the café or open another business there, she would have to pay full rates for an empty property. She says she therefore planned to open a different retail/hospitality business after the three months, though in the event by mid-March she stopped progressing those plans, believing a government ‘lockdown’ appeared imminent. This point relates to Mrs X’s plans for 16 March 2020 and after. It is not relevant to the situation on 11 March, which is what matters for grant eligibility.
7. Mrs X also later gave the Council evidence of bills received in February and March 2020 for electricity and rental of a cash register system. The Council did not have that evidence on 11 March. Neither do those receipts show the property was actually ‘being used’ on 11 March for the purposes I set out in paragraph 6. So that evidence is not relevant to the Council’s refusal of the grant.
8. Mrs X states she saw no reason to tell the Council before 11 March of her plans to reopen. That would not have made a difference to the grant decision. Only if a business was actually running as set out in paragraph 6 by 11 March, and if Mrs X had told the Council by 11 March that a business was open so she should no longer receive the empty property relief, might it have made a difference. Neither of those points happened.
9. Mrs X states she was planning to open a business again and the Covid-19 lockdown adversely affected her plans. She believes she missed qualifying for a grant by only a few days. If that is the case, it is unfortunate, but it did not enable the Council to award a grant.
10. For these reasons, I do not find fault with the Council not awarding Mrs X a grant.

Mrs X’s comments on my draft decision

16. Responding to a draft of this decision, Mrs X quoted the Council’s definition of the tenant as ‘the person or persons entitled to occupy the property at the start of the lease’, which she was. However, that definition does not necessarily mean the Council must continue believing the tenant is still occupying the property, in terms of rateable occupation, at any given time after the start of the lease. In this case, the Council gave reasons for not doing so. So this guidance does not mean the Council is at fault in Mrs X’s case.
17. Mrs X also cited various parts of the government’s guidance on the ERDS and on retail, hospitality and leisure grants. However, when deciding eligibility for a grant, the Council had to consider all the guidance together. It could only award Mrs X a grant if it decided that, at 11 March 2020, Mrs X’s property was occupied and ‘wholly or mainly being used’ for the sale of relevant goods, services or food and drink to ‘visiting members of the public’. The Council properly reached its position that Mrs X’s property had not met those requirements on 11 March 2020.
18. Mrs X referred to her plans to reopen, her holding off reopening when she believed a lockdown might be approaching, what she told Council and when about those matters, and her reasons for not telling the Council earlier. Those points are irrelevant to the Council’s decision about grant eligibility. That decision must consider the factual position at 11 March, irrespective of what plans Mrs X might have made for the future, or what she might have told the Council before or after 11 March about those plans, or what might have happened if she had actually reopened.

Mrs X’s comments on my draft decision do not persuade me to change my view.

The Council treating the property as unoccupied

19. The Council treated Mrs X’s business as a retail business for rates purposes until Mrs X said she had closed the business in December 2019. After that, it treated the property as unoccupied. That meant the property incurred no business rates for three months, then from 16 March 2020 the Council charged full business rates for an empty property. If the Council had instead treated the property as being used for retail, the ERDS would have applied and no rates would have been charged.
20. Mrs X argues the Council should treat the property as occupied, not empty, because:
• She was going to reopen and run a retail-related business and only the Covid-19 lockdown prevented her progressing those plans.
• She leases the property from a landlord, who cannot put anyone else into the property while she is leasing it; she pays rent, utility bills and other costs; and the landlord is not free to give the property to anyone else during her lease. Mrs X states this legally makes her an occupier so the property is not unoccupied.
21. The Council does not accept those points. It argues: for rating purposes it is only rateable occupation that is relevant; rateable occupation means beneficial occupation; so the Council would only treat the property as occupied if it was used ‘according to its nature,’ which here means actually being open to visiting members of the public as a café or shop, not just incurring some bills. The Council states case law supports its position. It therefore believes it correctly treated the property as unoccupied for rating purposes.
22. I cannot decide whether a property is occupied or not for rating purposes. As paragraph 2 explained, I can only consider whether the Council reached its decision properly.
23. Just because Mrs X leases the property does not automatically prevent it being empty in terms of rateable occupation. Nor did Mrs X argue that point during the first three months the Council treated the property as empty, when she did not have to pay anything. Anyone renting property could be liable for some bills; that does not necessarily make the property rateably occupied.
24. Overall, the evidence suggests the Council took account of Mrs X’s arguments and evidence, what it knew about the property and its understanding of the law. So I consider the Council reached its decision properly. Therefore I cannot criticise that decision.
25. I realise Mrs X and the Council disagree about the law. The Ombudsman cannot interpret the law where that is disputed. Only the courts can do that. If Mrs X believes the Council is wrong in law, she has the option of not paying and, if the Council takes her to court to get payment, she could argue her case in court.
26. Responding to a draft of this decision, Mrs X argued that her intent to reopen a business at the property meant the property had some benefit to her, therefore it was beneficially occupied. That is a disagreement with how the Council has interpreted the law. As explained above, that is not a matter for the Ombudsman.
27. Mrs X’s response to the draft also criticised information on the Council’s website about business rates and contrasted the Council’s treatment of its own commercial tenants with how it treated her. Those points concern whether the Council is correct to be treating Mrs X’s property as empty and demanding business rates accordingly. As explained above, that matter ultimately turns on interpretation of the law, so is not for the Ombudsman.

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Final decision

28. The Ombudsman should not investigate this complaint. This is because there is insufficient evidence of fault by the Council.

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Investigator's decision on behalf of the Ombudsman