Summary: Mr B complained the Council did not pay his business a small business grant to support businesses impacted by COVID-19. We do not find fault in the Council’s decision.

The complaint

1. I have called the complainant ‘Mr B’. He complains the Council refused his business a small business grant under a scheme set up to support businesses impacted by COVID-19. He also complains the Council has removed small business rate relief from his business rates bill.
2. Mr B says as a result his business has a rates bill that it cannot meet along with other unpaid bills. This has added to the distress caused by the impact of the pandemic on his business.

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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. 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. Before issuing this decision I considered:

• Mr B’s written complaint to the Ombudsman and any supporting information he provided, including that gathered in a telephone conversation with him;
• information provided by the Council in response to written enquiries;
• relevant law and Government guidance as set out in the text below.

6. Mr B and the Council also had the opportunity to comment on a draft of this decision. I took any comments received into account before finalising this statement.

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What I found

Small Business Rate Relief

7. Small business rate relief (SBRR) is applied if business premises have a rateable value of less than £15,000 and, in most cases, if the business uses only one property.
8. If relief is applied, then any business with premises with a rateable value of less than £12,000 will pay no business rates.
9. The relief can only be paid on occupied premises. Rating law has established four key tests to decide if premises are occupied. Of relevance to this complaint, one of the tests is that premises must be in ‘actual occupation’ by the ratepayer; i.e. being used by the ratepayer in conduct of their business.

The Small Business Grant Fund

10. 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).
11. To receive funding from the SBGF a business had to be in receipt of small business rate relief (SBRR) (or rural rates relief) on 11 March 2020. Eligible businesses would receive a grant of £10,000.

Key Facts

12. In November 2019 Mr B took on the rental of an office with its own rating assessment of less than £12,000. He did so with the intent of using it as a base for a mini-cab business for which he had set up a limited company. The office was located within a building containing several separate offices, each with their own rating assessment. Mr B completed an application for SBRR in the name of his company, which the Council accepted and applied. This meant he had no business rates to pay.
13. In December 2019 Mr B obtained a license from Transport for London (TfL) for his company to operate a mini-cab business from the office. Before he could obtain a license, TfL had to inspect Mr B’s business premises. By December 2019 Mr B had also opened a business bank account and set up an account with an internet and telephone service provider in the company’s name. He also had printed business cards.
14. In February 2020 an Inspector working for the Council visited the premises to check on occupation. They reported back the premises were empty. The Inspector’s notes say: “no change – property still empty – no unit number at the top. I have to count the doors to identify the property”.
15. In early April 2020 Mr B contacted the Council. He said he had closed his office temporarily because of the COVID-19 pandemic. He asked if his business was eligible to receive a grant.
16. The Council acknowledged Mr B’s contact and replied before the end of the month. It asked him several questions. One of those asked if Mr B was trading – noting the inspection in February 2020 recorded the premises as empty. It asked if Mr B could provide any evidence of trading. For example, bank statements.
17. Mr B replied to the Council confirming such details as the name of his business and that it was a mini-cab business. He said the premises were “used for taking and managing bookings however we didn’t get chance to advertise our business enough due to current situation”. Mr B enclosed business bank statements going back to November 2019. These showed only one small cash deposit made by Mr B. In reply to a further enquiry, Mr B said the business had no employees. He planned on sub-contracting orders for work to licensed taxi drivers.
18. In May 2020, the Council wrote to Mr B saying he could not receive a grant from the SBGF. By way of explanation it listed various criteria businesses had to meet to either receive a grant from the SBGF or another grant scheme set up to support retail, hospitality and leisure businesses. It did not explain which criteria it considered Mr B’s business did not meet.
19. Mr B contacted the Council and asked it to reconsider. He now sent it bills from the internet and telephone service provider. These showed Mr B had made several short calls since November 2019 to a single mobile number.
20. In early June 2020 the Council then wrote to Mr B saying it had removed the SBRR from his business rates account. It said this was because the premises were empty. This resulted in Mr B’s company receiving a business rates bill.
21. Mr B wrote in to complain at this decision and the refusal of a grant. He gave the Council a copy of the business rental agreement, duplicate bills from his internet service provider and copies of his business cards. He also sent a copy of his TfL Operator’s license and a letter confirming TfL had inspected his business premises. He said his business had not “picked up” because of the impact of COVID-19. In separate correspondence Mr B said that he could not spend all his time at the business premises, but this was not proof the premises were empty.
22. In reply the Council said none of the information Mr B provided showed his business was trading. It said the inspection in February 2020 found the premises empty, so it had to remove the SBRR. It apologised it did not act sooner to remove the SBRR, saying this was due to the disruptive impact of COVID-19.
23. The Council carried out a further inspection of the premises in early July 2020. This recorded the unit contained a desk, chairs and a computer. There was no indication anyone was working at the unit but a third party told the Council Inspector the premises were rented by a taxi company.
24. In comments made during this investigation, Mr B has suggested the Council made a mistake when it inspected in February 2020. He believes it may have gone to the wrong office because the individual offices do not have external numbers.

My findings

25. There is nothing in government guidance accompanying the administration of the SBGF that discusses the position where a business was in receipt of SBRR on 11 March 2020 and the Council later decided this was in error. So, I consider the position remained as it did before the Government announced the SBGF. This meant the Council could remove this relief if it decided it had granted it in error and it could backdate such a change. That is what the Council did here. The outcome to this complaint therefore depends on whether the decision to remove SBRR was one taken with fault. As it is that decision which led the Council not to award Mr B’s business funding from the SBGF.
26. In considering the removal of the SBRR I find there is evidence to suggest Mr B intended in late 2019 to begin operating a mini-cab business from the business premises he rented. He secured the premises for this purpose and obtained a TfL license and other services necessary to trade, such as internet connection and business cards. At some point before July 2020, he also fitted out the premises with basic office furniture needed to operate the business. I am therefore satisfied Mr B intended to occupy the premises to carry out his business.
27. But an intention to occupy is not the same as actual occupation. On Mr B’s own account, he describes a business that did not secure any bookings or work before the pandemic struck. And while an unsuccessful business could still be one in occupation of premises, there is nothing to show the premises were in use by Mr B. An inspection in February 2020 found no sign of activity on the premises. There is nothing in the bank statements or other evidence provided by Mr B that shows any activity taking place in connection with the business and by consequence that would be connected therefore with the use of premises.
28. I acknowledge there may be an element of doubt around the inspection in February 2020 as the Inspector’s own notes suggested some difficulty in identifying the correct premises. But there is nothing that shows the Inspector went to the wrong premises. And as I explained above, the inspection, while relevant, was not the only factor used by the Council in its decision. It is also clear the Council did not change its mind based on the later inspection in July 2020, which clearly identified the correct premises.
29. On balance therefore I am satisfied the Council’s decision to remove the SBRR from the business rates account was one taken without fault. I find it took account of all information Mr B provided in reaching this decision. I am also satisfied it took nothing irrelevant into account in reaching this decision. As I explained in paragraph 3 above our role is not to question a decision which has been properly made in this way by the Council.
30. I acknowledge the unfortunate consequence of this decision that Mr B’s business has suffered the double blow of not receiving a small business grant and receiving a backdated rates bill. But there is no action I can recommend here as this has not arisen because of any fault by the Council.
31. I have also considered the customer service Mr B received when he raised dissatisfaction with these decisions by the Council. I note the initial decision Mr B received telling him his business could not receive a grant was confusing. Because while it listed the criteria for receiving a grant, it did not distinguish which applied to his circumstances. This was not best practice, but it was not fault. I also find the later explanation provided by the Council remedied any uncertainty caused by that initial decision letter.
32. It was also unfortunate there was a delay in the Council removing the SBRR following the February 2020 inspection and in explaining this. Although I find the Council’s explanation for this delay credible given the impact of the pandemic on its usual working practices. The Council apologised and I consider this sufficient to remedy any distress caused by the delay in taking that decision.

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Final decision

33. In summary therefore I do not uphold this complaint. I find no fault by the Council in its decision to remove the SBRR from Mr B’s business rate account and the consequent refusal of a small business grant. Any flaws in the customer service received by Mr B have already been remedied by the Council’s actions. I have therefore completed my investigation.

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Investigator's decision on behalf of the Ombudsman