Summary: Mr X complains the Council refused to grant his business any rates relief, causing financial loss. We find no fault in the Council’s decision making process.

The complaint

1. Mr X complains about the Council’s refusal to grant his business rates relief, under the Expanded Retail Discount, causing financial loss.

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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 opportunity 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).

Small Business grant

7. Businesses which, on 11 March 2020, received Small Business Rates Relief (“SBRR”) may be eligible for a Small Business grant of £10,000, subject to further criteria.

Retail, Hospitality and Leisure grant (“RHL” grant)

8. Businesses which, on 11 March 2020, would have been eligible for the Expanded Retail Discount may be eligible for a RHL grant between £10,000 and £25,000, subject to further criteria.

Expanded Retail Discount

9. The Government extended business rates relief to retail, hospitality and leisure sectors under the Expanded Retail Discount (the “Discount”). It published guidance for councils; “Business Rates, Expanded Retail Discount 2020/21: Coronavirus Response Local Authority Guidance” (April 2020). This says each council will adopt its own scheme and decide whether to grant the Discount, having regard to the guidance.
10. Of relevance to this case, the guidance applies to businesses used wholly or mainly as shops, restaurants or cafes. These are defined as businesses used for the sale of food or drink to visiting members of the public.
11. The guidance lists the types of business included, however says this is a guide only and it is for councils to decide if a business is broadly similar in nature to those listed and so eligible.
12. The guidance also lists the types of business not included, but repeats this is a guide only and it is for a council to decide if a business is broadly similar in nature to those listed. Of relevance to this case, this includes businesses that are not reasonably accessible to visiting members of the public.

Council’s Expanded Retail Discount policy

13. The Council publishes a Retail Discount Policy 2019/20 and 2020/21 on its website. The Council refers to the full list of eligible businesses referenced in the Government guidance of April 2020 and says businesses that are not reasonably accessible to visiting members of the public will not be eligible.
14. The Head of Revenues and Benefits will be responsible for approving all applications, with a monthly review by the Director of Corporate Services. There will be no right of appeal.

What happened

15. Mr X runs a retail business delivering frozen ready meals to customers. He applied to the Council for financial support.
16. The Council told Mr X his business was not eligible for SBRR or the Discount. (It follows he would therefore not be eligible for the Small Business grant or RHL grant).
17. Mr X complained about the Council’s refusal of the Discount. He explained his premises included an office, freezer and warehouse. He had an online platform but also regular customers that collected directly from his premises. He said other franchises had received support. He considered his business should qualify for the Discount, in line with Government guidance.
18. The Council outlined the eligibility requirements for support with reference to the Government guidance. In regards to the RHL grant and Discount it noted Mr X was an online food retailer. However, the guidance listed eligible businesses and it did not consider his business to be wholly or mainly used in the ways listed, or broadly similar to the examples listed. Further, because his business operated an online order and delivery/distribution service from a workshop and premises, it considered it was not reasonably accessible to visiting members of the public. The Government guidance said such businesses were not eligible for the Discount. The Council said Mr X could contact the Ombudsman if he was unhappy with its decision.
19. Mr X disputed the Council’s decision as he could prove customers ordered by phone and collected from his premises. Further, that the Council’s decision was inconsistent with other councils.
20. The Council told Mr X to provide evidence the public could access his premises and buy products directly and it would consider this.
21. Mr X sent the Council photos to show the access to his premises. This included photos of the access road, car park and entrance.
22. The Council explained it needed evidence of sales on site to visiting members of the public. It also asked for evidence of how sales were advertised.
23. Mr X provided photos showing a storage area, kitchen and office. He provided copies of marketing material, advertising meals for delivery and he referred the Council to his website. He offered the Council further details of customers that collected from the site. He again said other franchises in different council areas had received the Discount.
24. I note the website shows people can order online or by phone from a brochure, for free home delivery. There is no option for collection or information about how you might access Mr X’s business in person.
25. The Council again referred to the eligibility criteria. It said Mr X’s business is one of the types listed in retail, leisure or hospitality but is not wholly or mainly accessible by the public from which purchases can be made on site. The marketing and advertising material he provided showed his core business is advertised via online and telephone contact with free delivery. It therefore did not accept the business is wholly or mainly accessible by the public as required by the Government scheme.       
26. In response to enquiries, the Council further explained to qualify a business had to evidence significant (mainly) in person customer interaction to purchase goods and services, like a shop, and members of the public must have been able to access the premises to do so. Mr X’s business is on the whole an online retailer that takes orders and delivers to home addresses. It obtained evidence from Mr X which supported this finding.
27. In comments on my draft decision Mr X disagreed with the Council’s decision on eligibility. He reiterated his business had regular collection customers, however the Council did not accept his offer to provide further evidence of this. He considered his business met the Government criteria for eligibility and he had evidence other councils had granted relief to franchises.

Findings

28. 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.
29. The Government provided guidance on businesses eligible for the Discount but allowed each council to adopt its own scheme and make its own decisions having regard to this. In this case the Council’s own scheme mirrored the Government guidance.
30. The guidance says shops, restaurants or cafes that are wholly or mainly used for the sale of food or drink to visiting members of the public will be eligible for the Discount. The guidance also says ineligible businesses include those not reasonably accessible to visiting members of the public.
31. The Council considered the information provided by Mr X including his assertion he had regular collection customers, photos of the premises, advertising material and information on the website. The Council found evidence showing people mainly ordered for delivery, without accessing Mr X’s premises. The Council concluded Mr X’s premises was not wholly or mainly used for sales to visiting members of the public, as necessary to be an eligible business. Further, because he ran an online order and delivery service, the Council found the business was not reasonably accessible to visiting members of the public, making it an ineligible business. The Council considered the information provided and decided in line with Government guidance and local policy. I find no fault in the Council’s decision making process.
32. As each council can adopt its own scheme, that other councils reached different decisions does not mean the Council is at fault.
33. I note the Council did not seek further evidence from Mr X about customers who collect from his premises. However, I consider the Council had enough information to form a view and, it is unlikely this would have affected the Council’s decision. This is because the Council did not dispute this point, but found other evidence showed the business was not wholly or mainly used in this way.

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Final decision

34. I have completed my investigation. I find no evidence of fault in the Council’s decision to refuse Mr X rates relief.

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Investigator's decision on behalf of the Ombudsman