Summary: We shall not investigate Mr X’s complaint about the Council refusing him a small business grant. This is because any investigation is unlikely to find fault by the Council.

The complaint

1. Mr X complains the Council did not give him a small business grant. He states this worsened his business’ financial problems from not being able to operate during the government’s COVID-19 restrictions and caused him stress.

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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 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’. 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. (Local Government Act 1974, section 24A(6), as amended)
4. 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

5. I considered the information Mr X provided and discussed the complaint with him. I also considered copy complaint correspondence the Council provided and information about the relevant premises on the Valuation Office Agency’s website. I shared my draft decision with Mr X and considered his comments on it.

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What I found

6. In March 2020, the government created schemes for councils to pay grants to small businesses. This was because the Covid-19 restrictions affected so many of those businesses. A business was eligible for a small business grant (SBG) if, on 11 March 2020, it was on the business rating list and eligible for small business rates relief. Government guidance states changes to the rating list after 11 March 2020, even if such changes are backdated to 11 March 2020, do not entitle a business to a SBG. A council can only 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.
7. The Valuation Office Agency (VOA), not the Council, compiles and makes changes to the rating list and decides if a business is liable for business rates and, if so, its rateable value.
8. The complaint concerns an address that the VOA had included for many years on the rating list as a single business premises. In 2018, Mr X’s business moved into part of the site, with the other business at the site continuing to occupy the rest. This split of the premises was not reported to the Council’s rating section or to the VOA at the time. So the rating list continued showing the address as one business premises rather than two.
9. Mr X told me he first contacted the Council after the government announced the grants scheme. That would have been after 11 March 2020. The Council refused Mr X a SBG as it made grant decisions based on what the rating list had said at 11 March 2020.
10. Later in 2020, the VOA changed the rating list to reflect the division of the address into two business premises. It backdated the change to 2018. Mr X’s part has a rateable value that qualifies it for small business rates relief.
11. The Council could only award a SBG if:
1. on 11 March 2020, the business was on the rating list and met the other criteria, or
2. on 11 March 2020 the Council was ‘factually clear’ the rating list was inaccurate for this address. The point here is not whether the rating list was inaccurate on 11 March 2020 but whether, on 11 March 2020, the Council knew the rating list was inaccurate.
12. On point a), on 11 March 2020 Mr X’s premises was not on the rating list in its own right. So the Council could not award a SBG on that basis in respect of Mr X’s premises.
13. On point b), on 11 March 2020 Mr X had not yet contacted the Council or VOA about the business’ rating position. So on that date the Council had no reason to believe the rating list was wrong in still showing the address containing only one business premises. 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.
14. The Council’s refusal to pay a grant was based on the government’s guidance and the information the Council had at the relevant time. So that decision was properly reached. Therefore, as paragraph 4 explained, I cannot criticise the decision. So I do not fault the Council for refusing a grant.
15. Mr X is dissatisfied that in April and June 2020 the Council told him he was not eligible for a SBG. For the reasons given above, I do not criticise the Council for that.
16. Mr X says other similar businesses in his sector whose circumstances were similar received SBGs from other councils. The Ombudsman does not regulate or oversee councils’ activities generally. Our role is to consider whether Manchester City Council was at fault for refusing Mr X’s grant application. As I have explained, the evidence suggests there was no fault. Therefore I need not investigate, or comment on, what might have happened to other businesses, including whether their circumstances were indeed the same as Mr X’s.
17. Mr X states he was unfamiliar with the relevant rating rules when he moved into his premises. I note that, but it does not mean the Council was at fault.

Mr X’s response to my draft decision

18. Commenting on a draft of this decision, Mr X reiterated: the Council was wrong to tell him he was ineligible for the SBG; he should have received a SBG because another council awarded it to others in similar circumstances; and he and the occupiers of the other part of the site where his business is based were not familiar with the relevant parts of business rates system when Mr X moved into his premises. I dealt with those points above, so Mr X’s repeating them does not change my view.
19. Mr X suggested the grants schemes were supposed to be universal, so it was wrong that he did not receive a grant when similar businesses did. However, the government was clear that councils should only give SBGs to businesses that met the eligibility criteria in the government guidance. There was no assumption that all businesses were automatically eligible. As I have explained, there was no fault in the Council deciding Mr X was not eligible for a SBG.
20. Mr X also pointed out the Council gave his business a more recent grant. He implied this meant he should also have received the SBG. However, the SBG had different eligibility criteria from the more recent grant schemes for local lockdowns and the second national lockdown. In particular, eligibility for the SBG depended on what the rating list said on 11 March 2020 (irrespective of later changes) and on what the Council knew on 11 March 2020. Those points do not apply to more recent grant schemes. So Mr X’s getting a more recent grant does not imply the Council was at fault for refusing him a SBG.

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Final decision

21. The Ombudsman will not investigate this complaint. This is because investigation would be unlikely to find fault in the Council not giving Mr X a small business grant.

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Investigator's decision on behalf of the Ombudsman