Summary: The Council decided the complainant did not qualify for a small business grant, because he was not trading from the premises where he was registered for small business rates relief. There is no evidence of fault in how the Council made this decision and so we cannot criticise it. For this reason, we have completed our investigation.

The complaint

1. I will refer to the complainant as Mr D.
2. Mr D complains the Council has refused to pay the Government’s COVID-19 small business grant to his business. Mr D considers his business meets the eligibility criteria and that the Council should pay him the £10,000 grant.

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The Ombudsman’s role and powers

3. 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”.
4. 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)
5. 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

6. I reviewed Mr D’s correspondence with the Council, and a chronology of key events provided by the Council.
7. I also shared a draft copy of this decision with each party for their comments.

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What I found

8. The following chronology includes only key events relevant to this complaint. It does not cover the details of all correspondence between Mr D and the Council.
9. Mr D runs a small business, for which he employees only himself. His business is registered at an address in the Council area, and was receiving small business rates relief (SBRR) on this basis. In April 2020, Mr D applied to the Council to claim the COVID-19 small business grant.
10. In May, the Council identified that Mr D’s business premises was listed for sale on an auction website. The Council decided to withhold the small business grant money and investigate.
11. The Council wrote to Mr D and asked him for his last bank three statements, to prove he was trading. Mr D replied to say the grant eligibility criteria did not require him to provide bank statements. He explained the premises had been listed for sale at the end of March and still contained his tools, which could be seen through the shutters.
12. The Council emailed Mr D again to explain it required his bank statements to prove he was trading from the property. Mr D replied to say his bank statements would “not show anything of importance” because he had been operating as a cash-only business for some time. He reiterated the grant eligibility criteria did not require him to provide bank statements.
13. On 2 June, the Council wrote to Mr D formally to say it was withholding the grant, because it was not satisfied his business had been trading on the eligibility date of 11 March 2020. The Council repeated its request that Mr D provide the evidence it required. Mr D replied to reiterate he had been trading, that the premises still contained his equipment, and that it was permissible for him to work remotely while maintaining a business address. He explained again he had been operating on a cash-only basis so his bank statements would not show anything.
14. On 18 June the Council visited Mr D’s business premises. It says it spoke to another local business owner, who said the premises had been closed since before lockdown. The Council took a photo through the shutters, which showed the premises contained some items but was not “occupied as such”. It emailed Mr D again on 20 June to maintain its decision not to pay the grant.
15. In September, the Council sent Mr D a new business rates bill, exempting him from SBRR with effect from 1 March 2020.
16. Mr D approached the Ombudsman on 1 October. We established that he had not yet made a formal complaint to the Council, and so referred it back to the Council as premature.
17. The Council provided Mr D a Stage 1 complaint response on 5 October. It explained, to be eligible for the small business grant, a business must be in receipt of either SBRR or Enhanced Retail Relief. These reliefs can only be paid where the business premises is in occupation for Non-Domestic Rates purposes, and for the purposes of the grant, must have been so on 11 March 2020.
18. The Council said it was not disputing that Mr D’s business was registered at the premises, but rather that the premises was not in use for business purposes on 11 March. It said this view was supported by its own inspection, and photos of the premises, which had been included on the auction website, showed the shop floor contained domestic items, such as a sofa, which demonstrated the premises was not being used for commercial purposes. The Council reiterated Mr D had not provided the evidence it requested to prove he had been trading.
19. Mr D wrote to the Council on 20 October, asking it for a ‘final response’ letter. The Council took this as a request to escalate the complaint to Stage 2, and sent Mr D a response on 23 November. The Council said its Independent Complaints Board had reviewed the matter and was satisfied it had dealt with it properly.

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Legislative background

Business rates

20. Business rates (also known as national non-domestic rates [NNDR]) is a local tax on business premises. The Valuation Office Agency (VOA) keeps the business rating list and decides if a property should be rated. The VOA also decides the rateable value of the premises, and the date each premises should enter and leave the list. The local authority then collects business rates, calculated on the rateable value of the relevant premises.

Small business rates relief

21. If a business occupies a single premises, which has a rateable value below a set level, it can claim SBRR. This means it will either pay reduced rates, or no rates at all.

COVID-19

22. 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 them. A business’ right to a grant depends on its rateable value on the business rating list and its eligibility for certain business rate reliefs on 11 March 2020.

Small business grant

23. Businesses which, on 11 March 2020, received SBRR were able to apply for a payment of £10,000.
24. Funding was payable to the person recorded as the ratepayer in respect of the business on 11 March 2020. However, where it was factually clear to the council on 11 March 2020 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.

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Analysis

25. The Ombudsman’s role is to review councils’ adherence to procedure in making decisions. Where a council has followed the correct process, considered all relevant information, and given a clear and cogent explanation for its decision, we generally cannot criticise it. We do not make decisions on councils’ behalf, or provide a route of appeal against their decisions, and we cannot uphold a complaint simply because a person disagrees with a council’s decision.
26. In this case, Mr D believes his business is eligible for the small business grant. This is because it was in receipt of small business rates relief on the qualifying date of 11 March 2020.
27. However, this is not in dispute, and indeed it appears Mr D’s claim for the grant money was initially successful. Rather, the Council subsequently came to the view that Mr D’s business had not actually been eligible for SBRR on 11 March, because it was not occupying the premises then. This, in turn, served to invalidate his claim for the small business grant. I note the Council issued an updated business rates bill in September, to reflect its belief the property was unoccupied in March.
28. The Council has relied on various pieces of evidence to support this decision, including that the premises contains what appears to be domestic items, that it was listed on the auction website as a ‘vacant’ unit, and that another local business says the premises had been closed since before lockdown. It also points to the fact Mr D has failed to provide bank statements to show the operation of his business, despite repeated requests.
29. For his part, Mr D says he has tools stored on his premises. He has explained the premises has been shuttered for some time because of an unrelated legal issue, and that his business operates on a cash-only basis, which means his bank statements show no income. He does not consider this provides evidence his business is not in operation.
30. As I have explained, it is not my role to make my own decision on Mr D’s eligibility for SBRR or the small business grant, nor to adjudicate on the dispute between Mr D and the Council. Rather, my role is to determine whether the Council has properly made its decision.
31. And in this case, I am satisfied the Council has made its decision properly. It has made various efforts to investigate Mr D’s use of the premises, including asking him for documentary evidence, visiting the site and speaking to another local business. It has explained, clearly, why it is not satisfied Mr D has been trading from the premises, and given him the opportunity to provide evidence to the contrary, which he has not done.
32. I am also not persuaded that Mr D’s comments on the Council’s evidence are enough to invalidate it. For example, that some of his possessions are on site does not prove he was operating a business from there. He has not provided a clear explanation why the separate legal issue means his premises must be shuttered, nor how he is still able to operate his business from the premises with it in this state. Nor has he satisfactorily explained why operating a cash-only business would mean his bank statements show no income.
33. Taking this together, I consider the Council was entitled to make the decision not to pay Mr D the small business grant.

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Final decision

34. I have completed my investigation with a finding of no fault.

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Investigator's decision on behalf of the Ombudsman