Erewash Borough Council (20 009 615)

Category : Benefits and tax > COVID-19

Decision : Not upheld

Decision date : 09 Aug 2021

The Ombudsman's final decision:

Summary: Mr X complains the Council paid the Small Business Grant for his premises to the wrong person and that an officer made an unpleasant comment during a telephone call to discuss the situation. He says the loss of the grant has worsened his financial problems. There is no evidence of fault in the Council’s actions. It did consider whether the listing was inaccurate and whether to exercise its discretion to award the Small Business Grant to Mr X but was not persuaded by the evidence provided by Mr X. We are unable to take a view on the comment made by the officer as he denies saying it and there is no recording.

The complaint

  1. Mr X complains the Council paid the Small Business Grant (SBG) for his premises to the wrong person and that an officer made an unpleasant comment during a telephone call to discuss this situation.
  2. Mr X says the loss of the grant worsened his business’ financial problems.

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The Ombudsman’s role and powers

  1. 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)
  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. 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

  1. As part of the investigation, I have:
    • considered the complaint and the documents provided by the complainant;
    • made enquiries of the Council and considered the comments and documents the Council provided;
    • discussed the issues with the complainant;
    • sent my draft decision to both the Council and the complainant and taken account of their comments in reaching my final decision.

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What I found

Small Business Grant Fund

  1. 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).
  2. 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.
  3. 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.
  4. In cases where it was factually clear to the Local Authority on the 11 March 2020 that the rating list was inaccurate on that date, Local Authorities could withhold the grant and/or award the grant based on its view of who would have been entitled to the grant had the list been accurate. This is entirely at the discretion of the Local Authority and only intended to prevent manifest errors.

Valuation Office Agency

  1. 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 keeps lists detailing the rateable value of commercial properties for business rates.

Key facts

  1. Mr X owns and works from a set of garages and workshops. The property is listed as one hereditament for business rates and has not been split into different units.
  2. In 2015 the Council carried out an inspection of the premises after which it sent Mr X a closing demand and made Mr Z the ratepayer, backdated to 2014. There is nothing to suggest Mr X or Mr Z queried this. In April 2019 Mr X contacted the Valuation Office Authority (VOA) saying Mr Z had left the premises. Mr X did not contact the Council to inform it of this change and so Mr Z remained liable for the business rates.
  3. Mr Z provided his bank details to the Council on 7 April 2020 to enable it to pay him the SBG. On 15 April, the Council authorised the grant and paid Mr Z £10,000 into his bank account. On 22 April Mr X completed an application for the SBG. On 2 May the Council sent an email explaining his application had been refused. It explained a different ratepayer had been occupying the property since 2014 and he had not been the listed ratepayer for many years.
  4. Mr X began corresponding with the Council regarding the situation. On 8 June the Council emailed Mr X saying it had made him liable for business rates for the property with effect from 9 May 2020. It said this was based on information Mr X provided in an email dated 13 June in which he said he told Mr Z he was no longer welcome to use his workshop on 9 May 2020. The Council said Mr X should consider applying for a discretionary grant as the applications closed that day. Mr X also asked questions about splitting the property into separate units and asked if they would then all be eligible for a grant.
  5. Following a telephone discussion with a council officer, Mr X made a formal complaint about a comment the officer made, saying it was offensive and unprofessional. The Council’s complaint response did not comment on the officer’s comment but explained why Mr X was not entitled to the SBG. It said Mr Z was in rateable occupation of the property and that Mr X had provided information saying he did not leave until 9 May 2020. It said that legal ownership of a property did not prove actual, exclusive beneficial occupation. The Council maintained its position that the SBG had been correctly paid to Mr Z.
  6. Mr X responded saying the Council had not investigated the complaint he actually made. He said his complaint was about the officer’s comment and not the SBG as he had not yet made that complaint. He again said he found the officer’s comment insulting and asked the Council to look again at his complaint form.
  7. The Council provided a further response two days later and said the complaint appeared to be the result of a conversation about the SBG so it made no apology for including comment about that. It said it had spoken to the officer who had no recollection of using the words attributed to him. The Council said Mr X had a “far reaching” conversation with the officer about the property and the business rates. It said the officer’s comments were not made in the context of Mr X avoiding paying tax and the officer expressed his regret if he considered this to be the case. The response also said the valuation status of the property was still to be resolved and this was primarily an issue for Mr X and the VOA.
  8. Mr X asked the Council for a meeting to discuss the issues relating to the refusal of the SBG. The Council said the matter could not be resolved through email correspondence or a meeting as the decision could only be changed on the presentation of evidence and this would need to be in writing. The Council was willing to review the case if Mr X provided written evidence.
  9. After Mr X escalated his complaint to stage two of the Council’s procedure, it provided a response on 9 September. It said it had already provided a comprehensive explanation of why the SBG was paid to Mr Z and the position regarding rateable occupation. It explained the decision to make Mr Z liable for the rates was made in 2015 following a visit to the premises and that the Council had had no contact with Mr X about this matter until after it refused his application for the SBG. The stage two response also made reference to the alleged offensive comments. The Council said it had nothing further to add other than it regretted Mr X took offence as it was not intended.
  10. Mr X contacted the Council again on 25 October regarding the SBG. He quoted the guidance which said where it is factually clear the rating list was inaccurate it could withhold the grant or award it based on who would have been entitled. Mr X said he had tried to assist the Council with this but the Council had not been helpful. Mr X provided detailed information about Mr Z and his use of the premises. Mr X said the Council should reclaim the SBG from Mr Z and pay it to him.
  11. The Council decided the complaint could not be escalated to stage three of its complaints procedure as Mr X had not provided any new information. It gave him the opportunity to provide further information within 28 days and it would then escalate the complaint. Mr X did not do this but instead complained to the Ombudsman.

Analysis

  1. Mr X complains the Council paid the small business grant (SBG) for his premises to the wrong person and that an officer made an unpleasant comment during a telephone call to discuss this situation. I will deal with each issue in turn.

Payment of small business grant to wrong person

  1. Mr X applied for the SBG in respect of his business but was refused because it has already been paid to Mr Z. Government guidance is clear that only one SBG could be paid per property. The guidance also states the SBG will be paid to the person who, according to the authority’s records, was the ratepayer on 11 March 2020. So it would appear the SBG was correctly paid as Mr Z was the listed ratepayer on 11 March 2020.
  2. Mr X claims the rating list was inaccurate and that he should have been the listed ratepayer on 11 March 2020. He has made this claim to the Council and so I have investigated how the Council considered Mr X’s claim and whether there was fault in that process.
  3. Mr X has presented some evidence to the Council in respect of the property. This included hand drawn sketches of the premises showing who used what parts and the dates used as well as utility bills in his name and invoices for parts purchased by Mr Z but in Mr X’s business name. It also included a statement from the VOA saying Mr X informed it in 2019 that Mr Z was no longer at the premises.
  4. I am satisfied the Council has considered this information as well as a statement from Mr X that Mr Z left in 2020. The business rates are now in Mr X’s name but only from 9 May 2020 onwards. It says Mr X has not pursued a review with the VOA regarding the entry in the ratings list to “split” the premises. It considers this supports its view the ratings list was correct on 11 March 2020.
  5. The Council says it has considered its discretion to award the grant to someone not on the ratings list on 11 March 2020. Mr X argues the rates should never have been in Mr Z’s name but this happened in 2015 and Mr X never challenged this until after his application for the SBG was refused. While Mr X has presented some evidence such as utility bills in his name, the Council says this is not reliable evidence that shows the rating list was incorrect on 11 March 2020 and that therefore the SBG was wrongly awarded to Mr Z.
  6. I appreciate Mr X is frustrated the SBG was given to Mr Z. However, he was the listed rate payer on 11 March 2020 and the Council has given Mr X the opportunity to present evidence to show the listing was inaccurate. The Council is not persuaded the evidence presented by Mr X shows the listing was inaccurate and it is not the Ombudsman’s role to replace decisions properly reached. I am satisfied the Council did consider Mr X’s representations and then used its judgement to decide its record of the rate payer was accurate. I find no fault in how the Council considered this.
  7. Mr X has also complained about comments an officer made during a telephone conversation. While the Council apologised to Mr X for any offence caused it denied the comments were made as reported. As there is no recording of the conversation it is not possible for me to now investigate this matter and come to any conclusion about fault.

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Final decision

  1. I will now complete my investigation as there is no evidence of fault causing a significant injustice.

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Investigator's decision on behalf of the Ombudsman

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