Summary: Ms E complains the Council did not award her a small business grant under a scheme to support businesses impacted by COVID-19. We do not find fault in the Council’s decision to refuse a grant nor the advice it gave to Ms E in reply to her enquiries about potential eligibility.

The complaint

1. I have called the complainant ‘Ms E’. With her husband (‘Mr E’), she owns holiday accommodation in the Council’s area which the couple rent out as a business. Ms E complains the Council refused her a small business grant under a scheme introduced by government to support businesses impacted by COVID-19. Ms E also complains the Council misled her into thinking they would receive a grant when she made enquiries about this matter.
2. Ms E says as a result she lost out on a source of financial support which would have helped compensate for lost bookings during 2020.

Back to top

The Ombudsman’s role and powers

3. We investigate complaints of injustice caused by ‘maladministration’ and ‘service failure’. I have used the word ‘fault’ to refer to these. 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 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)
5. 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”. 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)
6. 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)

Back to top

How I considered this complaint

7. Before issuing this decision statement I considered:

• Ms E’s written complaint to the Ombudsman and any supporting information she provided;
• correspondence exchanged between Ms E and the Council pre-dating the complaint to the Ombudsman;
• information provided by the Council in reply to our written enquiries;
• relevant government guidance as referred to in the text below;

8. I also gave both Ms E and the Council a chance to comment on a draft decision where I set out my proposed thinking about this complaint. I took account of any comments made before completing my investigation.

Back to top

What I found

Small Business Grant Fund

9. In March 2020, in response to the COVID-19 pandemic, the government created schemes for councils to pay grants to small businesses. These included the Small Business Grant Fund (SBGF).
10. To receive funding from the SBGF a business had to be in receipt of small business rate relief (SBRR) or rural rates relief. Eligible businesses would receive a grant of £10,000.
11. Government guidance on eligibility for the SBGF scheme said:

• “Any changes to the rating list (rateable value or to the hereditament) after 11 March 2020 including changes which have been backdated to this date should be ignored for the purposes of eligibility.
• Local authorities are not required to adjust, pay or recover grants where the rating list is subsequently amended retrospectively to 11 March 2020.
• In cases where it was factually clear to the Local Authority on 11 March 2020 that the rating list was inaccurate on that date, Local Authorities may withhold the grant and/or award the grant based on their view of who would have been entitled to the grant had the list been accurate.
• This is entirely at the discretion of the Local Authority and only intended to prevent manifest errors”. (see Grant Funding Schemes – Small Business Grant Fund and Retail, Hospitality & Leisure Grant Fund Guidance – paragraphs 35 to 38).

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 in England, Scotland and Wales. It compiles and keeps lists detailing the rateable value of commercial properties for business rates.

Chronology of key facts and investigation

13. Mr and Ms E live outside the Council’s area. In September 2019 they bought holiday accommodation in the Council’s area with intending to rent it out for income. They told the Council and it made them liable to pay council tax on the property. If someone owns holiday accommodation and uses it mostly for personal use then they will pay council tax. However, where someone rents out holiday accommodation as a business then it can alternatively be listed for non-domestic rates (sometimes known as business rates).
14. The first record the Council has of becoming aware Mr and Ms E used the accommodation as a business was an email it received on 11 May 2020. Ms E sent this to a general enquiry email address at the Council. Her email explained the couple had bought the accommodation in 2019, undertaken renovation on it and planned to let it out. Ms E said she had seen information suggesting they might be eligible to apply for a business grant.
15. The Council replied on 12 May. It explained the accommodation could be liable for council tax or non-domestic rates dependent on the use. The email said: “for you to be able to claim the grant […] the property would have needed to be registered for non-domestic rates and be eligible for small business relief. If your property is a domestic property but should be non-domestic then you can request this is changed”. The email went on to tell Ms E that she should get in touch with the VOA if she wanted the property entering on the non-domestic rating list.
16. On 13 May Ms E thanked the Council for its reply. Then on 18 May 2020 she applied to the Council non-domestic rates service for SBRR. The Council replied on 21 May. It explained Ms E could not claim SBRR until the property was entered on the non-domestic rating list and for this to happen she must contact the VOA. The Council said that if the VOA entered the property on the non-domestic rating list she would receive SBRR. But that “government guidance is clear on paying the grants out: any changes to the rating list (rateable value or to the hereditament) after 11 March 2020 including changes which have been backdated to this date should be ignored for the purposes of eligibility. Local authorities are not required to adjust, pay or recover grants where the rating list is subsequently amended retrospectively to 11 March 2020”.
17. By 12 June 2020 Ms E had contacted the VOA. She asked the Council if it knew how long the VOA would take to respond. It told her that it could not comment on behalf of the VOA and she should contact it direct. It also said that “we have been updated on the current Covid-19 business grants – as your business was not on the list on 11 March 2020 unfortunately you will not qualify for the grant”.
18. Later that month the VOA contacted Ms E and the Council to say it had entered the accommodation on the non-domestic rating list, backdating the change to before 11 March 2020. There was a further exchange of emails and a telephone call between Ms E and the Council around the council tax payments she had made, including one taken by direct debit around this time. Two days after it received notification from the VOA, the Council confirmed it had made Ms E liable for non-domestic rates and it had applied the SBRR, meaning she had nothing to pay. It also confirmed Ms E no longer owed council tax and was due a refund as the VOA had backdated the eligible date for the non-domestic listing.
19. Ms E then submitted a complaint. She was unhappy the Council would not also award a small business grant. Ms E said the Council had took too long to tell her she could not receive a grant.
20. In its reply to the complaint the same day, the Council went over its contacts with Ms E in respect of the accommodation. It said that it did not know before 18 May that Mr and Mrs E used it as a business and that on 21 May it had explained they would not receive a grant. It also told Ms E to cancel the direct debit set up to pay council tax.
21. A further exchange of emails followed the next day. The Council told Ms E it had now processed a council tax refund. It said because it had no evidence the accommodation was used for business before 11 March 2020 it could not change its decision on entitlement to a small business grant.
22. In reply Ms E said that “we are new and did not know what to do” and that “when I did write yes it was May but I was never informed it was too late” (to receive a grant).
23. Ms E escalated her complaint to this office. In communications with this office she has said she contacted the Council earlier, on 1 February 2020 to enquire about registering the property for non-domestic rates. She sent us two emails. The first was sent to the Council at a general enquiry address for non-domestic rates. It said: “Hello I am really sorry to ask, we own [accommodation] in […], we want to let out and unsure how we go about getting business rates”. The second email sent one minute later, was an automated receipt sent from the non-domestic rates email address.
24. The Council says that it has no trace of receiving an email from or sending one to Ms E on 1 February 2020. It says that its IT system will only allow it to check emails sent and received in the previous 90 days. But as part of its enquiries into this matter, it asked if Ms E could provide the emails in their original form. Ms E sent me a further copy of the automated receipt she says she received on 1 February, which I forwarded to the Council. The Council noted that this further email had a different sender address. It appeared to originate from a general enquiry email address used by the Council and not the non-domestic rates enquiry email address. It had the same time sent as that email referred to in paragraph 23 above.
25. In comments on a draft of this decision Ms E has explained that a close relative fell ill and sadly passed away in February 2020. This event caused her distress and she implies she struggled to focus on other matters. Ms E also asked us to note that she went on to let out her business several times in the second half of 2020.

My findings

26. I have begun by considering if the Council was at fault for refusing Ms E a small business grant. I am satisfied it was not. This is for the reasons the Council has explained to Ms E in its correspondence. I find no reason to challenge its interpretation of the relevant government guidance which I quoted in paragraph 11. I am satisfied it was not factually clear to the Council on 11 March 2020 that its rating list was incorrect in respect of the accommodation owned by Mr and Mrs E. Further that it was under no duty to pay a grant following the retrospective amendment of the rating list.
27. I have made this finding while noting Ms E’s statement that she contacted the Council before 11 March to enquire about business rates. I have considered if this provided an opportunity for the Council to realise its record was incorrect by that date. I find there is insufficient evidence to reach this conclusion. I note the Council has no record of the emails that Ms E says she sent and received on 1 February and no way of making further checks due to the passage of time. I do not find this on its own persuasive. But I consider I should give only limited weight to the copies provided by Ms E because they contain the following inconsistencies:

• First, the different email addresses that appear in the email Ms E says she received from the Council on 1 February 2020; I recognise this was a difficult time for Ms E because of her relative’s illness, but I can think of no explanation for why an email sent to one generic enquiry address would generate an automated response from a different generic enquiry address.
• Second, the apparent contradiction between the content of Ms E’s email dated 1 February and her statement in June 2020, when she complained, that she first contacted the Council to enquire about non-domestic rates in May 2020. I also note that at no point before our investigation did Ms E raise the prospect she had also contacted the Council in February 2020. This is despite several email exchanges with the Council as I detailed above.

28. I also do not uphold the complaint Ms E has made about the Council’s communications with her. I accept the email it sent her on 12 May 2020 was unclear and potentially confusing. It might be read as saying Ms E had a potential entitlement to a grant. But the emails sent on 18 May and 12 June 2020 clarified the position. Consequently, any confusion lasted for less than a week. And I am satisfied that from 18 May 2020 onward Ms E should have realised her business would not qualify to receive a grant and. So, even if I said this amounted to fault, it would not cause Ms E any significant injustice.
29. I also find no reason to think the Council’s communications caused Ms E to go to any unnecessary time and trouble. Ms E would always have had to contact the VOA and then claim SBRR to benefit from the holiday accommodation being registered for non-domestic rates. This would apply regardless of the COVID-19 pandemic and small business grant scheme.
30. I noted the Council’s initial reply to Ms E’s complaint did contain a minor error in referring to its first record of contact from her as being on 18 May and not 11 May 2020. But I do not consider this significant enough to justify a finding of fault. Because this made no difference to the content of the reply Ms E received, which I consider was reasonable.
31. Finally, I noted there was some confusion for Ms E around the council tax payment taken unnecessarily around the time the VOA completed its assessment. However, I am not satisfied the Council had time to stop the council tax payment which was in any event in Ms E’s control (as she could have cancelled the direct debit). I note that within three days of the VOA notice, the Council had set up a non-domestic rates account, applied SBRR to the account and processed a refund of council tax. I find the Council therefore quickly resolved this situation, which was good customer service.

Back to top

Final decision

32. For reasons set out above I do not uphold this complaint. I have completed my investigation satisfied with the Council’s actions.

Back to top

Investigator's decision on behalf of the Ombudsman