Summary: Mr X complained the Council refused to award a small business grant, which caused financial hardship. The Council was not at fault.

The complaint

1. Mr X complained the Council refused a small business grant. He says this caused financial hardship.

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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. 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 “Good Administrative Practice during the response to Covid-19”.
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 considered:
• The information provided by Mr X and spoke to him about his complaint;
• The information the Council provided in response to my enquiries and in a discussion with a Council officer; and
• Relevant law and guidance, as set out below.
7. Mr X and the Council had an opportunity to comment on my draft decision and I considered their comments before making a final decision.

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What I found

Relevant law and guidance

Grant Funding Schemes

8. In response to the coronavirus 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. Funding is payable to the person recorded as the ratepayer in respect of the business on 11 March 2020. However, in cases where it was factually clear to the council on 11 March 2020 that the rating list was inaccurate on that date, it has discretion to award the grant based on their view of who would have been entitled to it.

Small Business Grant

10. Businesses which, on 11 March 2020, received Small Business Rates Relief (“SBRR”) may be eligible for a payment of £10,000.
11. Eligibility for SBRR is subject to s43 of the Local Government Finance Act 1988. This says the relief applies to occupied businesses.
12. Gov.uk says if you use more than one business property you can claim SBRR on the main property for 12 months after acquiring your second property. You can continue to get SBRR on your main property after that period if none of your properties have a rateable value above £2,899 and the total rateable value of all your properties is less than £20,000 (outside London).

Retail, Hospitality and Leisure Grant

13. Businesses which, on 11 March 2020, received the Expanded Retail Discount (ERD) may be eligible for a grant between £10,000 and £25,000. Government guidance makes clear ERD applies to occupied businesses that are mainly used for retail, hospitality or leisure.

What happened

14. Mr X runs a business in the Council’s area. In February 2020, he took on the lease for business premises to support his business. He said the business moved into the premises straightaway and started using part of the premises as an office “within weeks”. However, work at the premises stopped in early March due to the COVID-19 pandemic.
15. In early April, he applied for a small business grant, and a retail, hospitality and leisure (RHL) grant. The Council contacted Mr X for further information. Mr X sent it documents he said showed the business was occupying the premises, which included utility bills and an insurance document. The Council did not agree the documents showed the business was occupying the premises. After various emails about whether the premises were occupied, and two visits to the premises by Council officers, the Council decided to refuse to award a grant under either scheme because it said the business premises were empty.
16. Mr X was unhappy with the outcome. The Council reviewed the application and upheld its original decision. It wrote to him with its reasons. It said:
• To be eligible for the RHL scheme, the business premises must qualify for ERD on 11 March 2020. Mr X’s business did not quality because it consisted of two shops, both of which were empty, and not in use and not providing services to the public. Officers had visited the premises to confirm this;
• To be eligible for the small business grant scheme, the business must be eligible for SBRR on 11 March 2020. Mr X’s business did not qualify because both premises were empty and not in use by the business on the relevant date;
• Even if the shops were occupied, the business would not be eligible because SBRR only applies to one property.
17. Mr X remained unhappy and made a formal complaint. The Council reviewed the application and decided the officer’s decision was correct. It did not provide any further reasons for reaching this conclusion.
18. In response to my enquiries, the Council provided photographs taken on two dates in July 2020, which show the properties were empty after previous tenants had left and had not been fitted out for use by Mr X’s business. It said the main reason for refusing to award a grant was because the premises were empty.
19. In its original decision letter and the letter following its review of that decision, the Council said that even if the premises were not empty, Mr X would not be eligible for a grant because SBRR only applied to one property.
20. As part of my enquiries, I asked a Council officer to explain the Council’s approach to applications where a business operates from more than one premises. They explained that the key factor is whether the business meets the criteria for SBRR, not whether the business operates from more than one premises. They also confirmed the Council had not refused any grant applications on the basis that the business had more than one premises.

My findings

21. I cannot question whether the Council’s decision is right or wrong simply because Mr X disagrees with it. I must consider whether there was fault in the way the decision was reached.
22. Grants are only available to businesses where their business premises were occupied on 11 March 2020. The Council asked Mr X to provide evidence the premises were occupied and considered the documents he sent it. An officer visited the premises and took photos that showed the premises were empty and had not been fitted out for use. The Council therefore made appropriate enquiries and decided the premises were empty at the relevant date. There was no fault in the decision-making process. Therefore, I cannot comment on the conclusion reached.
23. The Council refused to award a grant because Mr X’s premises were empty. However, it also said Mr X would not be eligible even if the premises were occupied because SBRR only applied to one property. It is possible for someone to qualify for SBRR if they occupy more than one business premises, if the criteria set out at paragraph 12 is satisfied. In such circumstances, they may qualify for a small business grant.
24. The information in the decision letters was therefore misleading but this did not affect the decision to refuse the grant in Mr X’s case and I do not consider it was sufficiently serious to warrant a formal finding of fault.

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Final decision

25. I have completed my investigation. I have not found evidence of fault.

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Investigator's decision on behalf of the Ombudsman