Summary: Mr X complains about the Council’s decision to refuse a Small Business Grant, causing financial difficulties to his business. We find no fault in the Council’s decision making process.

The complaint

1. Mr X, acting on behalf of a business, complains the Council refused him a Small Business Grant, leaving the business without necessary funds and causing financial difficulties. He considers the Council has interpreted the meaning of “occupied premises” incorrectly.

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The Ombudsman’s role and powers

2. 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’. 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)
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. The law says we cannot normally investigate a complaint when someone could take the matter to court. However, we may decide to investigate if we consider it would be unreasonable to expect the person to go to court. (Local Government Act 1974, section 26(6)(c), as amended)
5. 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
• it is unlikely further investigation will lead to a different outcome.

(Local Government Act 1974, section 24A(6), 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)

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How I considered this complaint

7. I spoke to Mr X and I reviewed documents provided by Mr X and the Council.
8. I gave Mr X and the Council the opportunity to comment on a draft of this decision and I considered any comments provided before finalising my decision.

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What I found

Grant Funding Schemes

9. In response to the COVID-19 pandemic the Government introduced two grant schemes to support businesses. The Department for Business, Energy and Industrial Strategy published guidance for councils on how to apply these: “Grant Funding Schemes” (March 2020).
10. Grants were payable to the person who, according to the billing authority’s records was the ratepayer in respect of the hereditament on the 11 March 2020. However, where a council had reason to believe the information they held about the ratepayer on the 11 March was inaccurate, they could withhold or recover the grant and take reasonable steps to identify the correct ratepayer.
11. Any changes to the rating list (rateable value or to the hereditament) after the 11 March, including changes which have been backdated to that date should be ignored for the purposes of eligibility. Councils did not have to adjust, pay or recover grants where the rating list was amended retrospectively to the 11 March 2020. However, in cases where it was factually clear to a council on 11 March that the rating list was inaccurate on that date, it had discretion to award the grant based on their view of who would have been entitled to it.
12. Businesses eligible for Small Business Rates Relief (“SBRR”) on 11 March 2020 may be eligible for a Small Business Grant of £10,000. Eligibility for SBRR is subject to s43 of the Local Government Finance Act 1988. This says the rate applies to occupied businesses.
13. Businesses that would have been eligible for the Expanded Retail Discount on 11 March 2020, may be eligible for a Retail, Hospitality and Leisure Grant of up to £25,000. Government guidance “Business Rates, Expanded Retail Discount 2020/21: Coronavirus Response Local Authority Guidance” saids this grant was only available to occupied businesses.

Discretionary grants

14. The Government introduced further support for businesses, including a discretionary grant fund, with payments up to £25,000. In May 2020 it published “Local Authorities Discretionary Grants Fund- guidance for local authorities”.
15. This set out who was eligible for the scheme and the types of business to prioritise. I note only businesses which were trading on 11 March 2020 were eligible.
16. Each council was to adopt its own scheme having regard to the guidance. Councils had to set out their scheme on their website, providing clear guidance on which types of business were prioritised, and how it would decide on the level of grant.

Council discretionary grant fund

17. The Council’s website refers to its discretionary grant policy but does not provide a full copy of the policy as the scheme has since closed.
18. The Council has provided a copy its policy to the Ombudsman. This sets out eligibility criteria, including that a business must have been trading on 11 March 2020. Applications were initially open for two weeks, closing on 14 June.
19. I note the Council’s policy reflected the Government guidance. It initially prioritised businesses in line with the Government guidance and set out further priorities if funding remained.

Valuation Office Agency

20. 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 maintains lists detailing the rateable value of commercial properties for business rates.

What happened

21. The VOA recorded a business premises, Y, on its rating list.
22. On 5 March 2020 Mr X’s retail business entered into a lease agreement for one room within Y’s property.
23. On 11 March 2020 Mr X’s business was not on the rating list.
24. I have not seen any evidence to suggest the Council knew, on 11 March, that the rating list may be inaccurate.
25. The Council says, following contact with a representative of Mr X’s business on 4 May, it asked the VOA to look at the rating of his business.
26. In June the VOA liaised with Mr X and in July said it would enter his business onto the rating list, backdated to 5 March 2020.
27. On 3 July Mr X contacted the Council with reference to his correspondence with the VOA. As his business was now eligible for SBRR as at 11 March he wanted to apply for a “Retail, Hospitality and Leisure Grant”.
28. The Council explained it had to ignore any changes to the rating list after 11 March, including where new entries were added and backdated to 11 March. As his business was not on the rating list on 11 March he was ineligible for a grant. He could however claim SBRR backdated to 5 March.
29. Mr X wrote to the Council again, with reference to information from Gov.uk on small business grants. He said because his business occupied a property and was eligible for SBRR on 11 March, he was entitled to a Small Business Grant. Gov.uk said changes made to the rating list after 11 March would not affect eligibility.
30. The Council maintained the grant scheme was based on the rating list and ratepayer on 11 March. The information on Gov.uk said the grant was available to those eligible for SBRR on 11 March, however on that date his business was ineligible. Government guidance specifically said any changes to the rating list, including backdated changes should be ignored for the purposes of eligibility. It could not award a grant.
31. Mr X asked for a copy of the Government guidance and spoke to the Council by phone.
32. The Council wrote to Mr X, further to the call. It explained to qualify for a Small Business Grant he must be in receipt of SBRR. This was only available to occupied premises. It referred to case law on rateable occupation. Although Mr X took possession of the property on 5 March it considered he was not in actual occupation until the premises was fitted out and he had begun to store goods in it. Posts on its social media account in April showed it was unoccupied until June 2020. It considered the property was unoccupied on 11 March and so ineligible for a grant. There was no right to appeal but he could ask for an internal review.
33. Mr X also referred to case law and argued his business did meet the test for occupation. The Council responded again to explain why it disagreed, with reference to the relevant Act.
34. Mr X then sent the Council legal opinion that its decision was incorrect. The legal advice was that the business was eligible for SBRR on 11 March 2020 and so eligible for the Small Business Grant. It did not need to be in “rateable occupation” on that date. In any event, a review of case law on this point showed it was in rateable occupation on 11 March.
35. The Council reviewed its decision and confirmed Mr X remained ineligible. It noted he had decided not to apply for a discretionary grant.
36. Mr X complained to the Ombudsman, disputing the Council’s decision. He said he did not apply for a discretionary grant because the application form said this was only available to Bed and Breakfasts.
37. In response to enquiries the Council provided a copy of its discretionary grant policy and said the application form was no longer available. However, it had adapted the original application form for its extended grant scheme. It enclosed a copy of this application form, which refers to the extended discretionary grant funding scheme for Bed and Breakfast businesses.
38. In comments on my draft decision, the Council:
• Confirmed once the VOA added Mr X’s business to the rating list the Council updated its records and sent Mr X a demand notice. This included an exemption for the period 5 March to 31 May 2020, as the property was empty.
• Clarified Mr X could claim SBRR from the date of occupation only.
• Said legislation meant the business was not eligible for SBRR as it was not occupied at the relevant time. So even if it exercised discretion concerning the rating list the business would not be eligible.
39. In comments on my draft decision Mr X said
• At all times he was acting on behalf of the business.
• The business does not have capacity to pursue the complaint in court
• The Council did not provide him with a copy of the relevant Government guidance, despite requests. This would have helped him to understand its decisions
• He did not apply for a “Retail, Hospitality and Leisure Grant”.  The Council suggested it would consider an application even though in his view the business did not qualify. 
• He had sought legal opinion on “occupation”. The opinion provided was that it was without doubt that the business was in occupation on 11 March 2020 and that this required no test as to whether relevant activity was or was not being undertaken. The Council’s response was to reiterate its test of trade having commenced without providing, although requested, any evidence to support this.

Findings

40. Government guidance made clear both the Small Business Grant and RHL Grant were payable only to the person recorded as the ratepayer on 11 March. Further, that councils should ignore any changes to the rating list (rateable value or property) after 11 March, unless the Council knew on 11 March the list was inaccurate.
41. It is not in dispute that Mr X’s business was not on the rating list on 11 March.
42. The Council refused Mr X a grant because his business was not on the rating list on 11 March and he was not the recorded ratepayer on 11 March. I have not seen anything that suggests the Council knew the rating list was inaccurate on 11 March. And, although Mr X’s business was later added to the rating list, Government guidance said the Council had to ignore this change. Bearing these points in mind, I consider the Council’s decision was in line with the Government guidance and relevant law. I therefore find no fault.
43. The Council did not have to consider “occupation” once it found Mr X ineligible for the reasons above. However, it addressed Mr X’s points on this. Law and Government guidance made clear both grants were only available to premises occupied on 11 March. The Council considered Mr X’s business was not occupied on 11 March and gave reasons for its view with reference to relevant evidence and law. I note Mr X wanted the Council to provide a more substantive response in light of the legal opinion he received, however I do not consider this amounts to fault, as the Council had already made its view clear.
44. Mr X maintains the Council’s interpretation of “occupation” is incorrect with reference to the legal opinion he received. However, I will not investigate this matter further. This is because it would not affect the Council’s decision on the grant and because the courts are the appropriate forum to decide on the interpretation of the law.
45. I am satisfied, on balance, that the Council published details of its discretionary grant scheme(s) on its website. I note the original scheme was open to various businesses in line with the Government guidance. However, the Council’s extended policy only supported Bed and Breakfasts and this was reflected on the application form. I have not seen any evidence to suggest the Council stopped Mr X from applying under its first scheme. And, while it appears the second scheme was not available to his business, I consider it unlikely I would find fault by the Council. This is because the Government gave councils discretion on which businesses to prioritise for funding. I do not intend to investigate this point further because I consider any fault did not cause Mr X injustice and further investigation would not lead to a different outcome. This is because the discretionary grant schemes were only open to businesses trading on 11 March 2020, and the Council considered Mr X’s business did not meet this requirement.
46. I would expect the Council to provide copies of any relevant law, policy or guidance to Mr X upon request. And I note Mr X says the Council did not do so. However, I will not investigate this point further. This is because the Government guidance is available online and because the Council did otherwise explain its decision. I therefore consider it unlikely I would find fault causing injustice.

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Final decision

47. I have completed my investigation. I find no fault in the Council’s decision to refuse Mr X a Small Business Grant.

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Investigator's decision on behalf of the Ombudsman