Summary: The Ombudsman will not investigate Ms X’s complaint about the Council not paying her a Covid-19-related business grant. There is not enough evidence of fault by the Council.

The complaint

1. Ms X complains the Council did not give her business a Covid-19-related business grant. She reports the lack of a grant worsened her businesses’ financial problems from being unable to operate for several months due to the government’s Covid-19 restrictions.

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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 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)

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How I considered this complaint

4. I considered the information Ms X provided, copy correspondence between Ms X and the Council that the Council sent me, and relevant government guidance. I shared my draft decision with Ms X and considered her comments on it.

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What I found

The small business and retail, hospitality and leisure grant schemes

5. 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.
6. A business’ right to either of those grants depends on its rateable value on the business rating list on 11 March 2020 and its eligibility for certain business rates reliefs on that date. Government guidance states later changes to the rating list, even if such changes are backdated to before 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.
7. 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.

Ms X’s business

8. In 2018 Ms X bought a house to use as a holiday let business. The house was registered for council tax, not business rates. The Council states Ms X contacted its council tax section at the time to take over responsibility for the house’s council tax. The Council says Ms X did not state she intended to use the house as a holiday let or ask to be registered for business rates until 25 March 2020. Ms X has not disputed that. Thereafter, the VOA listed the house for business rates instead of council tax and backdated the change to December 2018.
9. The government’s Covid-19 restrictions meant Ms X was unable to operate the holiday let for over three months in 2020. The Council said that on 11 March 2020 the house was not on the rating list, neither did it have reason to believe the rating list was wrong on that date. So the Council refused Ms X a small business grant or a retail, hospitality and leisure grant.
10. Ms X argued that, as the VOA later added the house to the rating list and backdated the change to December 2018, ‘my argument is that the rating list was inaccurate by virtue of the VOA’s decision to backdate.’ However, for grant eligibility, the relevant point is not whether the rating list was inaccurate but whether by 11 March 2020 the Council knew the rating list was inaccurate. The government guidance is clear about that and is also clear that backdated changes to the list after 11 March 2020 do not make a business eligible for a grant.
11. On 11 March 2020, Ms 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 Ms X had not yet told the Council she was using the property as a holiday let business. The later change to the rating list and the backdating of that change did not make the business eligible for a grant, as paragraph 6 explained. So I do not consider the Council was at fault for not giving Ms X a small business grant or a retail, hospitality and leisure grant.
12. Regarding the retail, hospitality and leisure grant, the Council also says Ms X would not have been eligible anyway because her business would not have been eligible for the expanded retail discount scheme (ERDS), which is a precondition for this grant. Businesses might only be eligible for the ERDS if they owe business rates. Ms X does not owe any business rates because her business receives full small business rates relief. I see no fault on this point either.
13. While this is not directly part of Ms X’s complaint to the Ombudsman, the Council’s correspondence with her also referred to its discretionary grants scheme. The Council states its budget for discretionary grants was all spent on businesses in categories the government asked councils to prioritise: businesses in shared offices and certain market traders, bed-and-breakfasts and charities. I see no fault here.

Ms X’s response to my draft decision

14. Responding to a draft of this decision, Ms X suggested the government’s guidance did not contain the points I have mentioned above. That is incorrect. The government’s guidance for local authorities about the small business grant fund and the retail, hospitality and leisure grant fund contained the points I mentioned. The Council had to follow that guidance. If other information online was less complete than, or differed from, the guidance for local authorities, that is not a matter for the Council or the Ombudsman. So Ms X’s comments did not change my view.

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Final decision

15. The Ombudsman will not investigate this complaint. The evidence suggests the Council was not at fault.

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Investigator's decision on behalf of the Ombudsman