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

The complaint

1. Mr X complains about the Council’s decision to refuse him a small business grant, causing his business increased financial losses. He considers the Council ignored relevant evidence and may have refused the grant because of his heritage.

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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. 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

5. 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

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. Relevant to this case, businesses which, on 11 March 2020, received Small Business Rates Relief (“SBRR”) may be eligible for a Small Business Grant of £10,000.
8. Eligibility for SBRR is subject to s43 of the Local Government Finance Act 1988. This says the rate applies to occupied businesses.
9. Funding is payable to the person recorded as the ratepayer in respect of the business on 11 March 2020.

What happened

10. Mr X says his Company X purchased a property in 2017 and sub let part to Company A and Company B, while occupying part itself. He says he did not tell the Council about this set up because he believed it would make no difference to the business rates payable.
11. The Council says it recorded the business ratepayer for the property as Company A from 6 April 2015 to 31 March 2017 and Company B from 1 April 2017 to 13 February 2020. It was unaware Company X occupied or traded from the premises.
12. On 13 February 2020 a Council officer visited the property because a third party told it Company B had stopped trading.
13. On 14 February the Council issued a business rates demand notice to Company X, as the property owner. This showed the property benefited from the empty property relief from 13 February 2020 to 1 April 2020 and no rates were payable.
14. On 16 March the Council sent Company X a further demand notice. This showed the property benefited from the empty property relief from 1 April 2020 and no rates were payable.
15. On 27 March Mr X asked the Council for the application form to apply for a small business grant. The Council replied to say it recorded the property as empty, so no grant was payable. However, he should register as the new occupier.
16. Mr X explained his business, Company X, bought the property in 2017 and the rates account was in its name. It sub let to Company A and Company B. However, Company X had also occupied and traded from the property since 2015, only stopping temporarily due to the COVID 19 pandemic.
17. Mr X chased payment of the grant on 16 and 29 April. On 26 April Mr X completed a change of occupier form and a SBRR form, seeking relief from December 2019 to 31 March 2020. On these forms he says he purchased the property in July 2017. Company B was listed as the business ratepayer, however Company B ceased trading in December 2019 at which time Company X became liable for business rates.
18. The Council treated Mr X’s correspondence as a complaint and replied on 14 May. The Council told Mr X its records showed the property was unoccupied on 11 March and therefore not eligible for a grant. He would need to provide evidence of trading on 11 March for it to review this decision.
19. Mr X told the Council he moved furniture between rooms to allow carpets to be fitted but other parts of the building were occupied. On 13 February the Council officer did not enter the premises and only spoke to a third party carpet fitter, unable to answer any questions about the business. Mr X enclosed a letter from his accountant confirming Company X continued trading from the premises while refurbishment was undergoing and until lockdown on 20 March.
20. The Council responded to explain two companies had been liable for business rates since 2015. Company A from April 2015 to March 2017 and Company B from April 2017 to 13 February 2020. Mr X was director of those companies and in making applications for SBRR at no time said the premises was in multiple occupation or sub let. It received information that Company B had ceased trading and so visited the property on 13 February. On inspection it found Company B had left. It had not been given any other information and so it issued a bill to the owner of the premises, Company X, on 14 February 2020, applying the empty rates discount for the year 2020/21. According to its records, the property was unoccupied on 11 March and so it has not awarded SBRR and it is not eligible for the small business grant. It would only review its decision if Mr X could prove Company X’s use of the property at the relevant time.
21. Mr X complained the Council had ignored the letter from his accountant and queried how else he could prove they were trading from the property on 11 March. He explained Company B paid business rates under the tenancy agreement. Company B left the premises in early February 2020. The Council officer spoke to the third party carpet fitter and did not ask to speak to any employee on site. He did not challenge the demand notice of 14 February because he would not have to pay business rates in any event and so felt there was no need.
22. The Council said the letter from Mr X’s accountant says Company X was trading from the premises but this does not evidence that trading was taking place at the premises. Its records showed two companies listed for business rates, not Company X. He did not tell the Council he was operating from the premises. He did not declare any periods of multiple occupation or sub lets. It therefore had no knowledge of the relationship between the occupants and his company. After inspection it decided the property unoccupied and sent him notice of the empty rates discount which he did not dispute. It was not told a business operated from there and it observed refurbishment so it reasonably concluded it was empty. He should have been aware of the obligation to declare information and any change of circumstances.
23. In response to enquiries the Council explained it asked an inspector to check if Company B had left the property. The inspector found Company B’s signage removed and the blinds pulled down. The inspector saw three men working on site and asked if Company B was still operating from the property. The men confirmed they were workmen and had no further information. They did not volunteer any other information, did not say other parts of the building were in use or say the owner was present to speak to. As it appeared to the inspector no relevant person was in the property they could not inspect further. The Council has no powers to enter premises without permission of the occupier/owner for the purposes of business rates. It did not know Company X owned the property. It discovered this following a land registry search. It issued an empty rates bill to Company X as the owner, immediately after the site visit. It did not receive any communication from Company X to either dispute the bill or to provide occupation details, until Mr X applied for a grant on 27 March.

Findings

24. The small business grant is only available to premises occupied on 11 March. The Council decided the property was not occupied on 11 March and so ineligible for the grant. It took account of information that the previous occupant had left; it was not made aware of any other occupant; upon its site visit it found the previous occupant had left and the property appeared empty and; the owner of the property did not dispute a demand notice issued on 14 February which showed the Council recorded the property as empty. I am satisfied the Council considered relevant information in reaching its decision and there is nothing to suggest the Council took account of irrelevant information, such as Mr X’s heritage, race or nationality. There is also nothing to suggest the Council decided Mr X’s case differently to others in similar circumstances. I therefore find no fault in the Council’s decision making process.
25. I note it was Mr X’s responsibility to ensure the Council and the Valuation Office had the correct information about the businesses occupying the property. I am also mindful Mr X had the opportunity to correct the Council upon receipt of the empty rates bill of 14 February, though did not do so.
26. Mr X says the Council should have arranged the site visit with him as the owner, it should have inspected inside the property and, it should not have relied on information provided by workmen. However, the Council has explained the visit was to check if Company B was still in occupation, it had no right to inspect inside the property and, it did not rely on information provided by workmen. The Council has given clear reasons for its actions and there is nothing to suggest it failed to follow any relevant law or policy. I therefore do not find any fault by the Council.

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Final decision

27. I have completed my investigation. This is because I find no fault in how the Council decided on Mr X’s eligibility for a small business grant.

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Investigator's decision on behalf of the Ombudsman