Summary: We will not investigate Mr X’s complaint about the Council’s refusal to award him a government grant for businesses affected by the COVID-19 pandemic. This is because it is unlikely we would find fault by the Council.

The complaint

1. The complainant, Mr X, complains the Council wrongly refused his applications for grants under the government’s small business grant fund (SBGF) and discretionary grant fund (DGF).

Back to top

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 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)

Back to top

How I considered this complaint

4. I reviewed Mr X’s correspondence with the Council, shared my draft decision with him and considered his comments.

Back to top

What I found

SBGF

5. 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.
6. 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. Government guidance states later changes to the rating list, even if they 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 already had good reason to believe the rating list was inaccurate for a particular address or business.
7. The Valuation Office Agency (VOA), not the Council, compiles the rating list and decides on liability for business rates and rateable values.  Not every business appears on the rating list as not all of them have to pay business rates.
8. Mr X applied for a grant under the SBGF in May 2020 but the Council refused his application. This was because it considered his application did not meet the criteria. It confirmed the VOA had removed Mr X’s premises from the rating list at his request in 2019 and did not know it was being used by Mr X’s business on 11 March 2020. It did not therefore consider there were grounds to exercise its discretion to award a grant.
9. Mr X disputes the Council’s decision but I have seen no evidence of fault in the way it was reached. The Council considered the information Mr X provided but decided his application did not meet the criteria and did not fall within the limited circumstances in which it could exercise its discretion.

DGF

10. The government has given councils some funding for discretionary grants to businesses and asked them to make their own policies for awarding these grants.
11. The government guidance asks councils to prioritise four types of businesses for discretionary grants:

• small businesses in shared offices or flexible workspaces;
• regular market traders with fixed building costs;
• certain bed and breakfasts;
• and certain charity properties.

12. Beyond that, the guidance gives councils discretion on awarding grants, stating:

‘Where limits to funding available for this scheme require local authorities to prioritise which types of businesses will receive funding, it will be at the local authorities [sic] discretion as to which types of businesses are most relevant to their local economy. There will be no penalty for local authorities because of their use of discretion to prioritise some business types.’ (Department for Business, Energy and Industrial Strategy: Local Authority Discretionary Grants Fund – guidance for local authorities, paragraph 26)

13. Because the Council refused Mr X’s SBGF application Mr X applied to the Council for a grant under the DGF. The Council refused this application, initially because it considered the business premises was trading from a domestic property, which Mr X says is not correct, and later because Mr X did not provide sufficient evidence to show a significant loss of income due to the COVID-19 crisis, which was a requirement of its policy. Mr X disputes this requirement as it is not set out in the government guidance but it is part of the Council’s policy and we cannot therefore say it was wrong to apply it.

Back to top

Final decision

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

Back to top

Investigator's decision on behalf of the Ombudsman