Summary: Mr X complains the Council refused him business rates relief and a business grant, resulting in distress, time and trouble. We find no fault in the Council’s decision making but find its poor communication with Mr X amounts to fault. We recommend the Council provides an apology and payment.

The complaint

1. Mr X complains about the Council’s refusal to award his business rates relief and a Small Business Grant during the COVID-19 pandemic. He says he has been put to time and trouble, and suffered distress.
2. Mr X also complains the Council has refused further grants and maintains his business is empty, which he disputes.

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What I have investigated

3. I have investigated Mr X’s complaint up to the date the Council issued its decisions on the grant and rates relief. At the end of this decision I have set out why I have not investigated new or ongoing issues.

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The Ombudsman’s role and powers

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’. 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. 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)
6. The law says we cannot normally investigate a complaint unless we are satisfied the council knows about the complaint and has had an opportunity to investigate and reply. However, we may decide to investigate if we consider it would be unreasonable to notify the council of the complaint and give it an opportunity to investigate and reply (Local Government Act 1974, section 26(5))
7. 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

8. I spoke to Mr X and I reviewed documents provided by Mr X and the Council.
9. I also listened to recordings of calls exchanged between Mr X and the Council dating from 17 April 2020 to 18 September 2020.
10. I gave Mr X and the Council the chance to comment on a draft of this decision. I considered any comments provided before finalising my decision.

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What I found

Grant Funding Schemes

11. 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).
12. Businesses which, on 11 March 2020, received Small Business Rates Relief (“SBRR”) could be eligible for a Small Business Grant (“SB 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 which, on 11 March 2020, would have received the Expanded Retail Discount were eligible for a Retail, Hospitality and Leisure Grant (“RHL Grant”) of up to £25,000. The Expanded Retail Discount applied to occupied businesses that are mainly used for retail, hospitality or leisure.
14. Funding was payable to the person recorded as the ratepayer in respect of the business on 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.
15. Businesses in liquidation or dissolved on 11 March were not eligible.
16. The RHL Grant was paid under the UK Covid 19 Temporary Framework for UK Authorities and subject to the recipient confirming they were not an undertaking in difficulty (within the definition of Article 2(18) of the General Block Exemption Regulation) on 31 December 2019.
17. The SB Grant was paid under another arrangement, except where the grant exceeded a threshold of 200,000 euros in which case the rule above applied.

Valuation Office Agency (VOA)

18. 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 1.9 million commercial properties for business rates.
19. Your business rates could change if:
• you move or make changes to your premises
• the nature of your business changes
• you sublet part of your property
• you merge two or more properties into one
20. You must report any changes to the VOA to ensure you are paying the right amount and do not get a backdated increase in your bill.

What happened

21. Mr X ran a business named Company X and the Council recorded Company X as the ratepayer at the relevant property.
22. In early 2019 Mr X dissolved Company X. He says he continued trading from the same premises as a sole trader. However, he did not tell the Council or VOA about this change.
23. On 2 March 2020 the Council issued a business rates bill to Company X for the year 2020/21 showing no charge due as it received SBRR. Mr X did not contact the Council to say this bill was incorrect.
24. On 11 March the Council’s records continued to show Company X as the ratepayer. The Council has since explained it does not routinely check records at Companies House to see if a company is still active. Rather, it relies on businesses letting it know of any change in circumstances.
25. On 17 April Mr X called the Council to say he dissolved Company X in early 2019 and asked for it to update its records. He explained he had been running a business from the property since. The Council asked him to confirm the change by email, also providing evidence of the date he took over occupation and started trading. The Council suggested he provide evidence such as utility bills, public liability insurance, bank statements, orders and any other evidence he may have. It explained it would review the evidence, update the account and then could consider his eligibility for a business grant.
26. On 19 April Mr X sent the Council letters from utility companies dated in 2019 and a water bill issued in 2019 with total charges of £23.86. He provided an electricity bill dated 5 March 2020 showing usage costs for the period 3 February to 4 March of £1.50 and another dated 7 April with usage costs of £1.80 for the period 5 March to 4 April 2020. He said he had no other bills as he tried to keep costs to a minimum and asked to apply for a grant.
27. Mr X chased a response from the Council on 24 April and 1 May.
28. On 1 May the Council told Mr X to apply online for the grant and complete a form to claim SBRR. It also asked him to provide additional proof of occupation as the documents provided to date were not overwhelming; for instance electric usage of only £1.50.
29. On 4 May Mr X applied for the SB Grant and on 13 May he applied for SBRR, providing the same documents in support.
30. On 5 June Mr X called the Council seeking an update. He had heard from a neighbour that an officer had visited the business, but he had not been told about this. The officer agreed to look into his account and call him back.
31. The Council has provided a copy of photos taken by its officer during a site visit to Mr X’s business. These are not dated but are attached to an email dated 5 June. The photos show a shop with no signage. All the shutters are pulled down and “for sale” is written on the shutters.
32. On 5 June the Council wrote to Mr X refusing the grant as the property was empty. It explained the grant was only available to businesses which qualified for SBRR (with a rateable value under £15,000), or for the RHL Grant (with a rateable value of £15,000 £51,000). Further the business must be occupied and financially viable as at the 31 December 2019. It also referred to the Government guidance.
33. On 8 June 2020, the Council made Mr X liable for business rates on an empty basis, as owner of the property.
34. On 10 June Mr X called the Council seeking an update further to his call of 5 June. The officer said the Council sent him a response on 5 June though Mr X had not yet received this. The officer read the response to Mr X. Mr X disputed the property was empty and was unhappy an officer visited the business without contacting him first. The officer said they would arrange for someone to contact him.
35. Mr X called the Council again on 11 and 18 June. He said he had now received the letter of 5 June but had not heard further since he disputed this. He had also received a bill for business rates. He thought the bill was incorrect as he now had to pay a charge whereas previously he did not. The Council officer said someone would call him back.
36. Mr X called the Council again on 24 June as he had still not heard from the Council further to previous calls. The Council officer told him he needed to write in to ask for a redetermination and provide any further information; he could not do this by phone. The officer also explained Mr X had received a bill for business rates as he would not benefit from SBRR while it classed the property as empty.
37. On 25 June Mr X emailed the Council to say the property was occupied. He enclosed photos dated 24 June showing the business open with furniture and equipment inside.
38. Mr X called the Council on 9 July, chasing a response. A Council officer told him to wait for someone to look at his last email.
39. Mr X called the Council again on 27 August as he had still not received a response. The Council officer he spoke to was the same one who carried out the site visit. The officer said she was local to the area, drove past his business every day and knew it was closed and empty since before March 2020. However, she had visited the site to take photos as evidence. Mr X explained he only opened for four hours per week and his opening hours varied so she may not have passed while it was open. The officer said she passed by the business at varying times throughout the day and through the week. Mr X said he only opened for a couple of hours so she may have missed this. Further, that his neighbour had assured her during the site visit that the business opened. The officer said she did speak to a neighbour but they confirmed the business was closed. In any event this was hearsay. Someone would contact him regarding his request for a redetermination.
40. Mr X called the Council again on 28 August. He said he had a written statement from his neighbour to say they told the Council his business did open. The officer suggested Mr X send this in along with any other evidence.
41. Mr X sent further correspondence to the Council on 1 September. He explained the Council officer must have visited when his business was closed. He did not have strict opening times. He operated on a cash basis and did not have insurance or a business bank account. He also sold items online 24 hours per day. He enclosed a written note from Mr Y at a neighbouring business referring to an officer visit on 21 May. At this time Mr Y told the officer the shop opened at the weekend.
42. The Council issued a response on 3 September. It explained the Government guidance said only those businesses registered for Business Rates on the Council’s records on 11 March 2020, and in actual occupation and trading from a business premises were eligible for the grants. He was not the person registered for rates on the Council records on 11 March and the premises were also rated as being empty and unoccupied. Councils had discretion to deviate from the guidance and pay the grant if it could be shown its record of the rateable occupier on 11 March was wrong. To prevent payment of grants in error and deter fraudulent claims, businesses wishing to register for rates after 11 March were required to provide irrefutable evidence they were in occupation of a premises and were eligible to receive the grant. It had reviewed his appeal and evidence. However, he could not provide many of the documents it would reasonably expect a business that was actively trading to be able to provide. And the documents provided did not clearly show he was in occupation and trading on 11 March. Therefore, its decision remained the same. The Council referred him to the Ombudsman should he remain unhappy.
43. On 15 September Mr X called the Council to query his business rates bill. He previously had no rates to pay and did not understand why he now had to pay. The officer agreed to call Mr X straight back. However, I have no record of any further call.
44. Mr X continued to dispute the Council’s decision that his business was empty however its decision remained unchanged.
45. On 27 November the Council addressed Mr X’s claim for SBRR. It apologised for the delay. It explained SBRR only applied to occupied properties. To date he had provided insufficient proof of occupation and so it charged him on an empty basis. He was not entitled to SBRR.
46. When I spoke to Mr X he said the Council continued to refuse SBRR despite him providing further evidence of occupation for its consideration. And, it had since refused other grants.
47. In response to enquiries the Council explained:
• It visited Mr X’s business during the week when it might expect the business to be open.
• Government guidance said if a ratepayer is bankrupt or a company is in liquidation as at the 31 December 2019 then they are deemed as an undertaking in difficulty and therefore not eligible for the grant.
• Regarding the evidence from Mr Y, the Council explained it would make a decision taking documentary evidence into account rather than rely on a neighbour’s say so (who may or may not be impartial). It would anticipate that a running business would be able to easily evidence they were in operation, through bills and insurance costs etc. Likewise there were visits on different occasions. The neighbour’s letter would not change any decision made.
48. The Council and Mr X have provided evidence of ongoing communications since the Council’s decision of 3 September on the grant and its decision of 27 November on SBRR. I note Mr X has provided further evidence for the Council to consider and he is unhappy with its responses to this.
49. In comments on my draft decision Mr X:
• Maintained his business was open and trading;
• Recognised he did not have all the evidence of trading the Council wanted, but these documents were not compulsory;
• Said the Council had given other businesses grants following a name change; it should not treat his differently;
• Insisted the statement from his neighbour is irrefutable evidence that his shop opens;
• Said he offered for the Council to visit him when his shop was open but it did not take up this offer.

Findings

50. I cannot question whether the Council’s decision is right or wrong simply because Mr X disagrees with it. I must consider whether there was fault in the way the Council reached its decision.
51. Government guidance said councils should pay the grant to the person recorded as the business ratepayer on 11 March 2020. However, if a council knew on 11 March their information may be inaccurate, they could take steps to identify the correct ratepayer.
52. Mr X was not the recorded ratepayer at the property on 11 March. The recorded ratepayer was Company X, a dissolved company which was ineligible for a grant. And, the Council had no information on or before 11 March to suggest it held incorrect information about the ratepayer.
53. Upon contact from Mr X in April 2020 the Council considered the information provided and amended its records so that he was now the recorded ratepayer. It also considered whether he occupied the business on 11 March. If so, it would pay him the SB Grant.
54. To receive the SB Grant, a business first had to be eligible for SBRR. However, this only applied to occupied businesses. It was therefore for the Council to decide, upon relevant information and evidence, whether Mr X occupied the business.
55. I note Mr X considers the Council should have paid rates relief and the grant once he clarified the name change. However, I am satisfied the Council acted in line with the Government guidance in considering occupation, and so I cannot find fault.
56. I note Mr X disagrees with the Council as to the evidence it should expect him to hold. However, I am satisfied the Council only suggested what evidence Mr X could provide; it did not set out an exhaustive list or fetter its discretion. I therefore do not find fault in this regard.
57. The Council considered the evidence and information Mr X provided. This included utility bills showing minimal usage and a lack of any public liability insurance, business bank account, or supplier invoices or orders. A Council officer also visited the site and took photos to show the property was closed. Mr X provided photos from inside the store and a statement from a neighbour that the business did open. I cannot see the Council took this neighbour statement into account at the time, however on balance I consider this would not have affected its decision. This is because the Council had previously said it would not take account of hearsay evidence and in response to enquiries confirmed it would not rely on a neighbour statement. The Council, having considered relevant evidence, decided the business was empty and Mr X was not trading on 11 March to receive the grant. I note Mr X disagrees with the Council’s judgement, however I find the Council followed a proper decision making process and reached a decision in line with the Government guidance. I therefore do not find fault.
58. I note Mr X attaches more weight to the neighbour’s statement and is unhappy the Council ignored this evidence. However, the Council has explained why it would discount this evidence and I cannot question its judgement.
59. I note Mr X offered for the Council to visit his shop at a time he was open and the Council did not take up this offer. However, it is for the Council to decide what information or evidence it needs to reach a decision. I therefore do not find fault.
60. The Council decided on the same information that the property was empty for business rates purposes and so Mr X was not eligible for SBRR. I recognise Mr X disagrees with the Council’s decision. However, I find the Council followed a proper decision making process. I therefore do not find fault.
61. I note the Council often promised to call Mr X back but failed to do so. It delayed responding to his request for a reconsideration from June to September and it delayed responding to his claim for SBRR from May to November. I consider the poor communication and significant delays amount to fault. Mr X was put to time and trouble contacting the Council and suffered uncertainty and distress for longer as a result. I will recommend a remedy to address this personal injustice. However, I am mindful councils were under significant demand at the time and I find no evidence of a systemic failing that requires further action.

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Agreed action

62. To remedy the injustice set out above I recommend the Council carry out the following actions within one month of the date of this decision:
• Provide Mr X with a written apology for the identified failings;
• Pay Mr X £100 for time and trouble;
• Pay Mr X £100 for uncertainty and distress.
63. The Council has accepted my recommendations.

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Final decision

64. I find no fault in the Council’s decision making but I find fault in its communications with Mr X. The Council has accepted my recommendations and I have completed my investigation.

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Parts of the complaint that I did not investigate

65. I did not investigate how the Council considered any new information or evidence from Mr X regarding occupation of his business. This is because we cannot investigate ongoing matters. If Mr X is unhappy about further decisions of the Council, it is reasonable for him to first complete the Council’s complaints/review process and allow it the opportunity to investigate and reply. If he remains unhappy with the Council’s final response he can contact the Ombudsman and we will consider whether we can and should investigate.
66. I did not investigate how the Council decided on further grants as it is reasonable for Mr X to first complete the Council’s complaints/review process and allow it the opportunity to investigate and reply. If he remains unhappy with the Council’s final response he can contact the Ombudsman and we will consider whether we can and should investigate.
67. I have not investigated whether the Council decided differently in relation to other businesses in the same circumstances as Mr X. This is because I have not seen evidence Mr X complained to the Council about this, for it to investigate and reply. Further, I have found the Council decided properly on Mr X’s case; any fault in how the Council decided for others would not cause him any injustice.

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Investigator's decision on behalf of the Ombudsman