Summary: Mr X complains the Council wrongly refused him a small business grant, causing financial loss and distress. We find no fault in the Council’s decision making process.

The complaint

1. Mr X complains the Council was wrong to refuse him a small business grant and did not properly apply Government guidance. He says he has suffered financial loss, distress and been put to time and trouble seeking to resolve this.

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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. 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:

• the injustice is not significant enough to justify our involvement, or
• it is unlikely further investigation will lead to a different outcome. (Local Government Act 1974, section 24A(6), as amended)

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.
7. I gave Mr X and the Council the opportunity to comment on a draft of this decision and I considered any comments provided.

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What I found

Small Business Grant

8. 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).
9. Businesses which, on 11 March 2020, were eligible for Small Business Rates Relief (SBRR) may be eligible for a small business grant of £10,000.
10. Funding is payable to the person recorded as the ratepayer in respect of the business on the 11 March 2020.
11. Councils should ignore any changes to the rating list (rateable value or hereditament) after 11 March even if those changes are backdated to 11 March. However, in cases where it was factually clear to the council on 11 March that the rating list was inaccurate on that date, it may withhold the grant and/or award the grant based on its view of who would have been entitled to it.

Valuation Office Agency

12. The Valuation Office Agency (VOA) provides valuations and property advice to support taxation and benefits to the government and local authorities. It compiles and maintains lists detailing the rateable value of 1.9 million commercial properties for business rates.
13. Gov.uk says your business rates could change if:
• you move or make changes to your premises
• the nature of your business changes
• you sublet part of your property
• you merge two or more properties into one
14. You must report any changes to the VOA to ensure you are paying the right amount.

What happened

15. The VOA recorded one single hereditament (building) on its rating list.
16. From 2019 the building owner carried out works to divide the building into separate offices for occupation by different businesses.
17. The Council has provided the Ombudsman with its record of contact with the building owner.
18. The Council’s records show it was in contact with the building owner and knew they were splitting the building into offices. Its written record of a phone call in July 2019 shows it asked the owner to provide plans for the building so it could report the change to the VOA for its assessment.
19. The Council spoke to the owner again in December 2019. Its written record of this call shows the owner said they intended to let the property in January 2020. The Council said it would review matters again in mid January and ask the VOA to split the offices from the date the tenancies completed, however it still needed the plans.
20. Mr X moved his business into the building in January 2020.
21. The Council’s records do not show any contact from the owner or evidence they provided plans.
22. The Council visited the property on 5 March 2020 to check on progress; it had rated the property as empty but believed it may now be occupied. Its records of the site visit show its officer could not gain access. They buzzed the intercom and there was no answer but it did go through to a voicemail facility so they left a message. The Council decided to list the property as occupied from 5 March and issue a bill to the owner to provoke a response.
23. On 11 March the property remained listed as a single hereditament; Mr X’s business was not on the rating list.
24. By email of 26 March, the owner sent the Council the plans requested, for it to contact the VOA.
25. Mr X applied for a small business grant.
26. The Council refused as Mr X was not the ratepayer on 11 March. The Council explained it knew the building was being split into offices but was not made aware when building works were complete. It knew a tenant was likely to move in in January but it did not receive confirmation of this. It did not know the rating list was inaccurate on 11 March and so it could not exercise discretion.
27. In further correspondence to Mr X the Council clarified it was not clear the rating list was inaccurate on 11 March as it did not know whether the VOA would decide to rate the businesses individually or not.
28. In comments on my draft decision Mr X said the Council should have considered the overwhelming evidence that the rating list was inaccurate and so awarded a grant. Alternatively, it could have withheld payment of the grant until the VOA decided on whether to make changes to the rating list. He also felt the Council could have done more to speed up the VOA’s assessment.

Findings

29. It is not in dispute that Mr X’s business was not on the VOA rating list on 11 March. This meant it was not eligible for a small business grant unless the Council knew the rating list was factually inaccurate on that date, in which case the Council would have discretion to award a grant.
30. The Council says it was not clear the rating list was inaccurate on 11 March as it did not know on that date if the VOA would change the rating list or not.
31. Having reviewed the documents provided, I accept the VOA had not reassessed the building by 11 March and so the Council could not say with certainty whether it would split the property and enter Mr X’s business onto the rating list. It was therefore not factually clear to the Council the rating list was inaccurate on 11 March and so it had no discretion to consider a grant. The Council refused Mr X a grant in line with Government guidance. I therefore do not find fault.
32. I acknowledge Mr X wanted the Council to take a different approach, exercising further discretion to award the grant on the likelihood the VOA would amend the rating list or, postponing payment until the VOA had amended the rating list. However, this would be contrary to the Government guidance, which we expect councils to follow.
33. I would expect the building owner to report any changes to the VOA. However, the Council said it would do so upon provision of the relevant plans. There is no evidence the owner provided the plans to the Council until 26 March 2020. I therefore consider any delay in the VOA assessment prior to the key date of 11 March, was not through the Council’s fault.
34. I note the Council carried out a site visit on 5 March to check on progress with the development, left a voicemail message and then issued a bill to the owner. There is no requirement for councils to arrange visits in advance. However, I note even if the Council had done so, this would not have affected the Council’s view of the rating list or the list itself, which remained subject to the VOA’s assessment and decision. I will not further investigate how the Council arranged the site visit because it is unlikely any fault caused significant injustice or that this would lead to a different outcome in this case.

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Final decision

35. I have completed my investigation. I find no evidence of fault in the Council’s decision to refuse Mr X a small business grant.

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Investigator's decision on behalf of the Ombudsman