Summary: The Ombudsman will not investigate this complaint about the Council not giving Mrs X a business grant. There is not enough evidence of fault by the Council.

The complaint

1. Mrs X complains the Council refused to give her business a grant. She reports this worsened the financial problems her business experienced due to the Covid-19 restrictions.

Back to top

The Ombudsman’s role and powers

2. 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”.
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. 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’. We provide a free service, but must use public money carefully. We may decide not to start or continue with an investigation if we believe: it is unlikely we would find fault, or the fault has not caused injustice to the person who complained, or the injustice is not significant enough to justify our involvement. (Local Government Act 1974, section 24A(6), as amended)

Back to top

How I considered this complaint

5. I considered the information Mrs X provided and discussed the complaint with her. I considered copies of correspondence that the Council provided. I viewed information on the Council’s website. I gave Mrs X the opportunity to comment on my draft decision.

Back to top

What I found

Small business grant and retail, hospitality and leisure grant

6. In March 2020, the government created schemes for councils to pay grants to small businesses and retail, hospitality and leisure businesses. This was because the Covid-19 restrictions affected so many of those businesses.
7. Not every business was eligible for these grants. A business’ right to a grant depended on its rateable value on the business rating list and its eligibility for certain business rates reliefs as at 11 March 2020.
8. The Valuation Office Agency (VOA), not the Council, compiles the rating list and decides if a business is liable for business rates and, if so, its rateable value.
9. Government guidance states later changes to the rating list, even if such changes are backdated to 11 March 2020, do not entitle a business to a grant. A council can make an exception if, on 11 March 2020, it was already ‘factually clear’ to the Council that the rating list was inaccurate for a particular address or business. This is only intended to prevent ‘manifest errors,’ such as the rating list wrongly identifying the property or rateable value.
10. Mrs X opened her business from her home address in 2017. The property was not already on the business rating list as Mrs X paid council tax, not business rates. Mrs X reports she did not realise she should enquire about business rates until after 11 March 2020, when she investigated the possibility of a Covid-19 grant. The VOA subsequently added Mrs X’s business premises to the rating list and backdated its entry to 2017.
11. On 11 March 2020, Mrs X’s business was not on the rating list. Neither did the Council have any reason on that date to believe the list was wrong in respect of that address, since Mrs X had not yet contacted the Council or VOA about the business. The later change and backdating on the rating list does not make the business eligible for a grant, as paragraph 9 explained.
12. So I do not fault the Council for refusing a small business grant or retail, hospitality and leisure grant.

Discretionary grant

13. The government also gave councils some funding for discretionary grants to businesses. The government guidance asks councils to prioritise four types of businesses for discretionary grants: small businesses in shared offices or flexible workspaces; regular market traders with fixed building costs; certain bed and breakfasts; and certain charity properties. Mrs X’s business was in none of those categories.
14. Beyond the four priorities listed above, the government guidance gave councils discretion on awarding grants, stating:

‘Where limits to funding available for this scheme require local authorities to prioritise which types of businesses will receive funding, it will be at the local authorities [sic] discretion as to which types of businesses are most relevant to their local economy. There will be no penalty for local authorities because of their use of discretion to prioritise some business types.’ (Department for Business, Energy and Industrial Strategy: Local Authority Discretionary Grants Fund – guidance for local authorities, paragraph 26)

15. The Council’s policy on discretionary grants excludes home-based businesses. Mrs X’s business is based at her home. The Council told Mrs X that was why it refused her application for a discretionary grant.
16. However, I have viewed the discretionary grant policy on the Council’s website. The policy also says the Council will only give grants to six categories of business. The first four are as set out in paragraph 13 above, in line with government guidance. There is no fault in that.
17. The other two categories are business types the Council decided were locally significant: certain children’s nurseries and certain supply chain businesses. Mrs X’s business is not in either of those sectors. Therefore, even if Mrs X’s business had not been home-based, it would not have qualified for a discretionary grant anyway.
18. The Council’s refusal did not mention this second refusal reason, but I do not consider that in itself caused Mrs X a significant injustice. This is because the key points are that the Council was entitled to prioritise discretionary grants as it did and Mrs X’s business did not qualify. So I do not consider there was any fault by the Council but for which Mrs X’s business would have received a grant.

Back to top

Final decision

19. The Ombudsman will not investigate this complaint. There is insufficient evidence of fault by the Council but for which Mrs X would have received a grant.

Back to top

Investigator's decision on behalf of the Ombudsman