Summary: Mrs X complains about the Council’s handling and decision on her request for a business grant, causing financial loss, uncertainty and distress. We find no fault causing injustice either in the Council’s process or in its decision making.

The complaint

1. Mrs X complains the Council delayed considering her application for a business grant, wrongly refused her a grant and used language which she finds discriminatory. She says she has suffered increased financial hardship, uncertainty and distress as a result.

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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 Mrs X and I reviewed documents provided by Mrs X and the Council. I gave Mrs X and the Council the chance to comment on a draft of this decision and I considered any comments provided.

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What I found

Discretionary grants

6. In response to the COVID-19 pandemic the Government introduced support for businesses, including a discretionary grant fund. In May 2020 it published “Local Authorities Discretionary Grants Fund- guidance for local authorities”. This says councils should make payments as quickly as possible to support struggling businesses. It anticipates the first payments under the scheme will be received by businesses by early June.
7. Councils can give a discretionary grant of £25,000, £10,000 or any sum under £10,000 to businesses which cannot access other grant funding (other than the Job Retention Scheme). The value of the payment is at the council’s discretion.
8. The funding is aimed at:
• small and micro business,
• business with relatively high fixed property costs,
• ones that have suffered a significant fall in income due to COVID-19 and
• ones which occupy a property with a rateable value of under £51,000.
9. It considers the following types of business should be a priority for funding but this is a guide only. Councils should decide themselves if a business is similar and, if so, whether it should be eligible for grants:
• Small businesses in shared offices or other flexible workspaces
• Regular market traders with fixed building costs, such as rent, who do not have their own business rates assessment;
• Bed & Breakfasts which pay Council Tax instead of business rates; and
• Certain charity properties
10. In taking decisions on the appropriate level of grant, councils may want to take into account:
• the level of fixed costs faced by the business
• the number of employees
• whether businesses have had to close completely and cannot trade online and
• the consequent scale of impact of COVID-19 losses.
11. Councils should set out their discretionary grant scheme on their website, providing clear guidance on which types of business are prioritised, and how it will decide on the level of grant.

Council discretionary grant fund

12. The Council published its policy for the operation of the local authority discretionary grant fund on 27 May 2020. This policy applied to phase one. If it had funds remaining after phase one it would run further phases.
13. At phase one of the scheme grants were only available to:
• Small businesses in shared offices or other flexible workspaces;
• Regular market traders with fixed building costs, such as rent, who do not have their own business rates assessment;
• Bed & Breakfasts which pay Council Tax instead of business rates; and
• Certain charity properties
14. As it aimed to support businesses with relatively high ongoing fixed property costs, businesses had to pay at least £250 in rent or other property costs per month from March to May to qualify. Similarly, as it aimed to support businesses which have suffered a significant fall in income due to the COVID-19 crisis it proposed to exclude businesses which have suffered a drop in income over the period March 1st - 31st May 2020 of less than £750.
15. The policy sets out the levels of grant available and how these are set. The minimum grant payable to qualifying businesses was £2500.
16. Applicants had seven days to appeal a decision on eligibility. An Appeal Panel of at least three officers would consider the appeal and issue a decision within one month.
17. The Council published its policy for phase two in June 2020. This opened the scheme up to more businesses but the qualifying criteria otherwise remained the same.
18. The Council published its policy for phase three in August 2020. Phase three part one opened up the scheme for more businesses but the qualifying criteria otherwise remained the same. Phase three part two was available for those businesses unable to evidence high ongoing fixed property costs but who did suffer a significant fall in income. Under this phase the only grant payable was a fixed sum of £1000.

What happened

19. Mrs X works as a sole trader providing beauty and hairdressing within a care home.
20. On 1 June 2020 Mrs X applied for a discretionary grant under phase one. Within the application she explained she paid a fixed fee of £300 per month to her landlord from her earnings. Although payments had been frozen for the last three months, she may have to pay all of the fixed rate; this was currently in discussion.
21. On 8 June the Council asked for further evidence of rental payments.
22. On 9 June Mrs X provided copies of bank statements, a contract and invoices.
23. I note the contract between her and the care home shows it engaged her to provide hairdressing services within the home and it would charge her fees as follows: “20% of takings will be charged”.
24. A letter dated in 2018 evidences an agreement for her to pay £50 per month for use of a treatment room within the care home.
25. The invoices provided show Mrs X invoiced the care home for services, but applied a 20% reduction to her charges to cover the internal fees.
26. The Council has provided an internal record from the officer who assessed Mrs X’s application. This says the ongoing property costs are paid as a commission on earnings. If Mrs X is unable to work she does not pay any costs, therefore she is ineligible under phase one.
27. The Council sent Mrs X its decision to refuse a grant on 9 July. It explained it would like to help every business but it had a finite fund. In line with Government guidance it had prioritised certain business types and sought to ensure the limited funds are primarily directed at businesses not only suffering significant losses as a result of COVID-19, but also demonstrating relatively high ongoing fixed business related property costs. It found she was ineligible to receive a grant under Phase One or Phase Two of the Discretionary Grant Scheme because her business did not have relatively high ongoing fixed property-related costs (defined as at least £750 for the period 1st March - 31st May 2020). The Council said it would keep her application on file and if it opened further phases in future it would assess her application against the new criteria. It referred her to its appeals process within the published policy.
28. On 23 July Mrs X complained to the Council. In summary she said:
• The Council had misunderstood. She had fixed outgoings of £300 per month. These were usually deducted from her pay but as she had not been working she had not made any money. But she will still have to pay these costs at some point as she is contractually bound to. Her landlord has agreed she does not have to pay while she is not working. But she has to pay these fixed costs and they will be factored into payments over the remainder of the year.
• The Council was slow to set up the scheme.
• The Council was slow to decide on her request for a grant meaning she had no time to apply under phase two.
• The language used in the refusal letter was discriminatory.
29. The Council responded on 13 August. In summary:
• It explained it had limited funding and could not provide a grant to everyone.
• It acted quickly to devise a scheme and is acting as quickly as possible to process applications for funding.
• At phases one, two and phase three part one, applicants had to meet the criteria for fixed property costs which she did not meet. There is no evidence the decision was based on her gender or status.
30. I note the Council has since considered Mrs X’s application under phase three part two and awarded her £1000.

Findings

31. In May 2020 the Government asked councils to set up discretionary funding schemes. The Council set up and published a scheme by 27 May 2020 and started processing applications from 1 June 2020. I consider these timescales do not evidence undue delay or fault.
32. The Council decided on Mrs X’s grant application within one month of receiving relevant information. While I recognise Mrs X would have been anxious for an outcome, I do not consider this is significant delay or fault. I also note the Council confirmed she was also ineligible under phase two; Mrs X did not have to apply again.
33. The Council refused Mrs X a grant as it considered she had not evidenced high ongoing fixed property costs as set out in its policy. I note Mrs X provided documents which showed she paid a fee of approximately £300 per month plus rent of £50 per month. The fee was based on her earnings and there was no evidence Mrs X had to pay the fee even if she had no work or earnings. Further Mrs X had not paid the fee for the last few months as she was not working. The Council considered the information provided, noting Mrs X did not have to pay any fees while she was not working. It concluded she did not have fixed property costs of at least £250 per month as required to qualify for the grant. I consider the Council took into account relevant information and decided in line with its policy. I find no fault in the Council’s decision making process.
34. I consider the Council’s decision letter was worded appropriately and there is no language that is objectively offensive or discriminatory. There is nothing to suggest the Council’s decision making was affected by bias or prejudice.
35. Mrs X did not appeal the Council’s decision within the timeframe set in its policy. However, she did challenge the Council’s decision through its complaints process. I note the Council maintained its previous decision without commenting on the new points Mrs X raised. While the Council was not obliged to carry out a review or appeal at this stage, it would have been good practice to address the points raised. However, I do not consider this amounts to fault causing injustice. This is because I consider the new information would not affect the Council’s decision. There remains no evidence that Mrs X had to pay fees or did incur high costs for the relevant period 1 March to 31 May. If Mrs X agreed to pay higher fees in future, once she returned to work, this would be a private matter between her and her landlord.

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Final decision

36. I have completed my investigation. This is because I find no evidence of fault causing injustice in the Council’s handling of or decision making on a discretionary business grant for Mrs X.

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Investigator's decision on behalf of the Ombudsman