Summary: Mr X complained the Council refused his application for a Retail, Hospitality and Leisure Grant without explaining why his business is not broadly similar in nature to businesses specifically listed as eligible. Mr X says he has suffered financial hardship. While the initial refusal letters failed to provide a detailed explanation for refusal, the Council has now explained its reasoning. There is no evidence of fault in how the Council reached its decision.

The complaint

1. Mr X complained the Council refused his application for a Retail, Hospitality and Leisure Grant without explaining why his business is not broadly similar in nature to those specifically listed as eligible.
2. Mr X says his business has suffered financially because the grant was refused.

Back to top

The Ombudsman’s role and powers

3. 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)
4. 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)

Back to top

How I considered this complaint

5. As part of the investigation, I have:
• considered the complaint and the documents provided by the complainant;
• made enquiries of the Council and considered the comments and documents the Council provided;
• discussed the issues with the complainant;
• sent my draft decision to both the Council and the complainant and invited their comments.

Back to top

What I found

Grant Funding Schemes

6. In response to the COVID-19 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).
7. Businesses which, on 11 March 2020, received Small Business Rates Relief (“SBRR”) could be eligible for a Small Business Grant (SBG) of £10,000. Eligibility for SBRR is subject to s43 of the Local Government Finance Act 1988. This says the rate applies to occupied businesses.
8. Businesses which, on 11 March 2020, would have received the Expanded Retail Discount were eligible for a Retail, Hospitality and Leisure Grant (RHLG) of up to £25,000. The Expanded Retail Discount applied to occupied businesses that are mainly used for retail, hospitality or leisure.

Expanded Retail Discount (the Discount)

9. In April 2020 the Government published “Business Rates, Expanded Retail Discount 2020/21: Coronavirus Response Local Authority Guidance”.
10. The Discount was available to premises wholly or mainly used for retail, hospitality or leisure.
11. The guidance listed the types of businesses that were eligible but this was not a full list. It was for councils to decide if a business not listed was broadly similar in nature to those listed and so eligible.

Key facts

12. Mr X’s business provides a self storage service as well as a retail space selling removal and storage consumables. Mr X made an application for a grant. On the form, Mr X ticked the box saying he was claiming for the Small Business Grant Fund (SBG). The Council wrote to Mr X on 16 April saying his application did not meet the Government Guidelines for eligibility. It did not provide any details to say why this was the case.
13. Mr X wrote to the Council on 26 April. He said he had checked the Government Guidance and could see no reason why the grant had been withheld. He said his property is defined for business rates purposes as “store and premises”. He explained the reception and retail areas are open and easily accessible to any member of the public. He said most customers are members of the local community who walk in off the street to book services and buy goods. He asked the Council to reconsider his grant request.
14. The Council responded on 11 May. It said that as the rateable value of his property is over £15,000 it was too high to be entitled to the SBGF. It explained that to quality for the RHLG the business must be in receipt of the Discount and to qualify for the Discount the hereditament must be wholly or mainly used for retail, hospitality and leisure purposes. It said this is a test on use rather than occupation. It said as the main use of Mr X’s property is a storage service and not predominately for retail purposes, he did not meet the criteria for the discount.
15. Mr X responded saying the main use of the property is a self storage and packaging materials service. He said this operates in a completely different way to a standard storage or warehousing company. He said virtually all customers walk in off the street in the same way as someone visiting a travel agents, tool or car hire centre or an estate agent. He said the guidance allows for hereditaments being used for the provision of services to be eligible for the grant. He quoted the guidance which states that authorities should determine for themselves whether particular properties not listed are broadly similar in nature to those listed and consider them eligible.
16. The Council responded on 14 May saying it had reviewed his application but considered the decision not to award the grant was correct. It said there was no dispute that there is access for members of the public or that it sells some products at the premises. It said that self-storage was not one of the listed qualifying activities in the guidance and that it had carefully considered whether the activity was broadly similar to those listed. It said it did not consider self-storage to be broadly similar to any of the listed qualifying services.
17. Mr X wrote to the Council again expressing his dissatisfaction with the decision. The Council said it would treat this as a complaint. It provided a response on 2 June which said the complaint was not upheld. It said the decision to refuse the grant was based on information held about his business and the government guidance. It said it found no fault with the process or reasoning behind the decision and that Mr X’s disagreement with the decision was no basis for it to find fault.
18. Mr X contacted the Council again complaining about the lack of explanation for refusing the grant application. He also provided details of similar businesses in the Bristol area that had been awarded grants. The Council did not respond but instead referred Mr X to the Ombudsman.

Analysis

19. Mr X complains the Council refused his application for a RHLG without explaining why his business is not broadly similar in nature to those specifically listed as eligible.
20. The information provided shows although Mr X initially applied for the SBG the Council has fully considered his application for the RHLG. The first rejection letter was very general and did not provide any specific reasons why the grant was refused. I appreciate the Council was working under pressure to distribute the grants quickly but it would have been better if a reason for the refusal had been given.
21. The Council has since reviewed its decision and it has provided more details of the reasons for refusing the grant. However, when responding to Mr X’s argument that the activity is similar to other activity listed in the government guidance, the Council’s reasoning was again very general in nature simply stating it did not consider self-storage to be broadly similar to any of the listed qualifying services. While this lack of detailed reasoning is not fault, I do not consider it helped Mr X understand why the Council was not paying the grant.
22. In response to my enquiries, the Council says the activities listed in the guidance offer face to face commercial activity. Its view is that storage facilities are not necessarily specific to a commercial activity and do not need to offer a face to face service. It says the vast majority of the site is self-storage space which is not wholly or mainly used for the sale of goods or services to visiting members of the public. It also said this means that for security reasons it is not reasonably accessible.
23. I am satisfied the Council has now provided detailed reasons why it does not consider Mr X is entitled to the Discount and the RHLG. The Ombudsman’s role is to consider how decisions are made. Where a council has followed the correct process, considered all relevant information and given clear reasons for its decision, we cannot criticise it. We do not make decisions on a council’s behalf or provide a route of appeal against their decisions. I appreciate Mr X does not agree with the decision made in this case, but as there is no fault in the process I cannot uphold the complaint just because Mr X disagrees with it.
24. Mr X also provided details of removal and self storage businesses he believes have received a grant. In response to enquiries the Council has explained these businesses are not located within its area but appear to be in neighbouring authorities. It is possible another local authority has taken a different view on the nature of these businesses and paid the grant. However, this is not evidence of fault in this case.
25. Mr X says that he was awarded the Discount. He says this was showing at one point on his online business rates account but it has now been removed. In response to Mr X’s claims about the Discount, I made further enquiries to the Council to ask if it had ever been awarded and then removed. The Council says the Discount was never awarded. While I understand Mr X’s frustration on this point, I have not seen any evidence to support his claim that he was awarded the Discount and I am not persuaded it is proportionate to investigate this further.

Back to top

Final decision

26. I will now complete my investigation as there is no evidence of fault.

Back to top

Investigator's decision on behalf of the Ombudsman