Summary: We will not investigate this complaint about the Council not giving Mr Y a business grant. Any investigation is unlikely to find evidence of fault by the Council.

The complaint

1. Mr X complains on behalf of Mr Y that the Council refused to give Mr Y a £10,000 small business grant. Mr X states the lack of a grant worsened the financial problems Mr Y’s business experienced from being unable to trade during 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 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)

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How I considered this complaint

4. I considered the information Mr X provided and the relevant law and government guidance. I shared my draft decision with Mr X and considered his comments on it.

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What I found

5. In March 2020, the government created a scheme 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 if, on 11 March 2020, it was on the business rating list and eligible for small business rates relief.
6. Government guidance states later changes to the rating list, even if such changes are backdated to 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.
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. Mr Y’s business property is not on the rating list. So the Council could only have given a grant if, on 11 March 2020, it was ‘factually clear’ to the Council that the rating list was inaccurate. The Council says this was not the case as it states the first its business rates department knew the rating list might be inaccurate in respect of Mr Y’s address was when Mr Y applied for a small business grant in August 2020.
9. Mr X points out the Council’s licensing department dealt with Mr Y when it licensed his business. He argues this means the Council knew about the business before 11 March 2020 so should have realised the rating list was inaccurate and should have contacted the VOA about that. In effect, Mr X argues the Council should have been ‘factually clear’ by 11 March 2020 that the rating list was inaccurate, so Mr Y should get the grant.
10. The Council’s licensing responsibilities are quite separate from its business rates duties. I do not consider the licensing department - or any other department Mr Y might have dealt with – was at fault for not contacting the business rates department with information about the address, or for not advising Mr Y to do so. So Mr Y’s dealings with the Council about a separate function are not directly relevant to business rates matters. I do not find fault on this point.
11. It follows that I do not consider the Council, in terms of its business rates duties, was, or should have been, ‘factually clear’ on 11 March 2020 that the rating list was inaccurate. Therefore I do not fault the Council for refusing Mr Y’s grant application.

Mr X’s response to my draft decision

12. Commenting on my draft decision, Mr X argued the Council’s licensing committee would have had to visit Mr Y’s property to see if it met the required standard. That is incorrect. Neither the current legislation for such licensing (which dates from 2018) nor the previous legislation (which was over twenty years old) said a committee should visit. The law requires a visit by a qualified inspector.
13. Mr X also stated, ‘In order to grant the licence the premises must be registered for business purposes and as such must be rated to pay business rates…’ That is also incorrect. For the activity Mr Y carries out, the requirement for a licence does not just apply to businesses. Indeed, government guidance states the need for a licence is not restricted just to registered businesses.
14. The law requires an inspection of the premises to decide whether the conditions attached to such licences will be met. The law sets out points that must be considered but those do not include the premises being ‘registered for business purposes’ or on the business rates list.
15. So, in the specific circumstances of Mr Y’s dealings with the Council’s licensing section about his licence, there was no requirement to check the business rates position.
16. Mr X also argued, ‘…all departments of local authorities that deal with commercial business premises…’ must consider the business rates implications of what they learn and tell the VOA of changes that may be relevant to business rates. There is no requirement to do so, nor is that our general expectation, as I have explained. I am not persuaded the Council was at fault for its licensing section not contacting either the Council’s business rates section or the VOA about Mr X’s premises. Mr X, as the occupier carrying on a business, had a responsibility to regularise the position.
17. The response to the draft decision also argued the Council could have used its discretion to give a grant because Mr Y was occupying the premises before 11 March 2020. However, as paragraphs 6 and 8 explained, the Council’s discretion in such circumstances is very limited. It did not allow the Council to award a small business grant in this case.

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Final decision

18. The Ombudsman will not investigate this complaint. This is because there is insufficient evidence of fault by the Council.

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Investigator's decision on behalf of the Ombudsman