Summary: Mr D complains the Council has not awarded his business a Retail, Hospitality and Leisure 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. But we do find fault in the Council giving Mr D misleading advice while it considered his application, which raised his expectations he would receive a grant. The Council accepts this finding and at the end of this statement we explain what action it has agreed to remedy the injustice that resulted.

The complaint

1. I have called the complainant ‘Mr D’. He runs a retail business in the Council’s area. He complains the Council did not award his business a Retail, Hospitality and Leisure (RHL) Grant under a scheme to support businesses impacted by COVID-19.
2. Mr D says as a result his business has missed out on financial support to help it cope with the impact of COVID-19.

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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”.
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)

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How I considered this complaint

7. Before issuing this decision statement I considered:

• Mr D’s written complaint to the Ombudsman and any supporting information he provided;
• correspondence exchanged between Mr D 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 Mr D and the Council a draft decision statement where I set out my thinking about the complaint and I invited comments. I took account of any comments received in response before completing my investigation.

What I found

Retail, Hospitality & Leisure Grants

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 grants specifically targeted at retail, hospitality and leisure businesses (RHL grants).
10. To be eligible to receive a RHL grant the business had be first eligible for the Expanded Retail Discount (ERD) scheme for business rates “had that scheme been in force” on 11 March 2020. Eligible businesses would receive a grant of £10,000 or £25,000 dependent on the rateable value of the business.
11. Government guidance on eligibility for RHL grants 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).

Chronology of key facts

12. Mr D began renting premises for his retail business in January 2020. He rented shop space at the front of a building. His landlord used space behind the shop and upstairs. At the time Mr D began renting the premises, the whole building appeared on the rating list and there was no separate listing for the portion of the building occupied by Mr D. So, he did not receive any bill for business rates.
13. Mr D spent several weeks fitting out his shop. Mr D says he telephoned the Council during February 2020 to enquire about his liability for business rates. He says the Council advised him to get back in touch when he had finished fitting out his shop. He subsequently began trading from the end of that month. The Council has no record of Mr D contacting it in February.
14. Mr D contacted the Council again on 20 March 2020 and again on 23 March. He says in both calls he enquired about funding to support his business given the impact of COVID-19. He explained about his business premises. Mr D says the Council told him that he needed to contact the Valuation Office Agency (VOA) to ask it to create a separate entry for his business premises on the rating list. Mr D believes the Council gave him an assurance at that time, that he would receive a grant if the VOA gave the premises a separate listing.
15. The Council’s notes of the call on 20 March do not record it giving any advice to Mr D about a potential grant. But its note of 23 March says he was told to contact the VOA “before this [i.e. the RHL grant] can be awarded”. The notes go on to say “[Mr D] not happy at this […] explained unable to give the grant if he is not registered, but once this split can look into that at later stage”.
16. Mr D contacted the Council again on 4 May 2020. He says it again led him to believe he would receive a RHL grant if the VOA provided his business premises with a separate listing. The Council recorded a brief note of the telephone call which says that it “explained no grant will be paid until the VOA have split the property”.
17. On 5 May 2020 there were emails between Mr D and the Council. Mr D was unhappy the Council could not pay a RHL grant before the VOA completed its assessment. In an email to Mr D the Council said “I am sorry to have to confirm what you have been advised previously is correct, without a direct link to a business rates account we are unable to award a business grant. The scheme as it currently stands makes the link with business rates inescapable and until the necessary split is done by the valuation office agency you are not going to have such a liability”.
18. On 20 May 2020, the VOA completed its assessment and created a separate entry for Mr D’s business premises on the rating list. Subsequently the Council produced bills for business rates payable by Mr D’s business. Mr D applied successfully for small business rates relief, so he does not have to pay business rates.
19. On 28 May 2020, the Council declined Mr D’s request for a RHL grant. The Council explained that it could not award the grant because on 11 March 2020 it did not know that the rating list for his business premises was incorrect. The Council has held to this position in response to Mr D’s complaint, providing Mr D quotes from government guidance which I have referred to at paragraph 11.

My findings

20. I have considered if the Council was at fault for refusing Mr D’s business a RHL grant. I am satisfied it was not. This is for the reasons the Council explained to Mr D 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 Mr D’s business premises. Further that it was under no obligation to pay a RHL grant after the rating list was retrospectively amended.
21. I have made this finding while noting Mr D’s statement that he had contacted the Council before 11 March to tell it he had moved into his business premises and explained he was renting part of a larger building. I have considered therefore if the Council missed an opportunity to realise its rating list was potentially incorrect before 11 March.
22. However, I find there is insufficient evidence to find the Council at fault. While both Mr D and the Council have records of their later telephone and email communications, none of these pre-date 20 March 2020. So, the only evidence is that of Mr D’s recollection, which I consider insufficient to make such a finding. But even if I accept Mr D’s account of the call I do not find this would be enough for the Council to know the rating list was incorrect.
23. But I find the Council should have made Mr D aware sooner that he would not qualify for a RHL grant. His conversation with the Council on 23 March 2020 occurred before the Government published guidance on which businesses would qualify for RHL grants (published on 24 March). I could not reasonably expect the Council to have given Mr D clear advice at that stage and in any event, its notes do not say Mr D would receive a grant, only that it would consider an application. They imply no more than the Council would consider any RHL grant application made by Mr D once the VOA had decided whether to give his premises a separate entry on the rating list.
24. But on 4 May the Council went further. Its notes suggest it told Mr D he would receive a grant if the VOA agreed to provide a separate listing for his business. I consider this advice flawed as I find Mr D’s business could not receive such a grant for the reasons explained above. The Council also missed the opportunity to correct its advice in emails exchanged the following day. The email it sent to Mr D did not correct the impression that if the VOA agreed to create a separate listing for his business premises then he would receive a RHL grant. These poor communications justify a finding of fault.
25. I also consider this fault caused injustice for Mr D. The Council wrongly raised his expectations of receiving a grant and so he suffered distress when he later found out he could not receive one.

Agreed action

26. The Council accepts these findings. To remedy the injustice identified at paragraph 25 it has agreed that within 20 working days of a decision on this complaint it will:
1. provide a written apology to Mr D accepting the findings of this investigation;
2. pay Mr D £100 in recognition of the distress caused to him as a result of the poor advice he received.

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Final decision

27. For reasons set out above I uphold this complaint finding fault by the Council causing injustice to Mr D. The Council accepts this finding and has agreed action that I am satisfied will remedy that injustice. Consequently, I can complete my investigation.

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Investigator's decision on behalf of the Ombudsman