Summary: Mr X complained the Council wrongly refused his application for the Expanded Retail Discount and the Retail, Hospitality and Leisure Grant. He says the financial loss has had a significant impact on his business. The Council gave different reasons for refusing the grant and misdirected itself about eligibility which is fault. It reviewed Mr X’s eligibility, but the decision did not changed. The Council has agreed to apologise and make a payment to Mr X to recognise his frustration and time and trouble pursuing the complaint.

The complaint

1. Mr X complained the Council wrongly refused his application for the Expanded Retail Discount and the Retail, Hospitality and Leisure Grant.
2. He says this financial loss has had a significant impact on his business.

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The Ombudsman’s role and powers

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’. If there has been fault which has caused an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), 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)
5. 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”.
6. 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

7. 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

Retail, Hospitality and Leisure Grants

8. In March 2020, in response to the COVID-19 pandemic, the government created schemes for councils to pay grants to small businesses. Relevant to this complaint it created Retail, Hospitality and Leisure grants (RHL grants) targeted at those sectors.
9. Businesses which, on 11 March 2020, would have received the Expanded Retail Discount were eligible for a Retail, Hospitality and Leisure Grant (“RHL Grant”) of up to £25,000. The Expanded Retail Discount applied to occupied businesses that are mainly used for retail, hospitality or leisure.

Expanded Retail Discount (the “Discount”)

10. In April 2020 MHCLG published “Business Rates, Expanded Retail Discount 2020/21: Coronavirus Response Local Authority Guidance”.
11. The Discount was available to premises wholly or mainly used for retail, hospitality or leisure.
12. The guidance listed the types of businesses that were eligible and included estate agents and letting agents. (These businesses had been excluded from the previous retail rates relief scheme.)
13. The guidance also listed the types of businesses not eligible. This included premises not reasonably accessible to visiting members of the public.

Principles of good administrative practice

14. The Ombudsman publishes a guidance document setting out the standards we expect from bodies in jurisdiction. This includes:
• having clear and accessible appeal routes.
• providing clear and timely information on how and when to appeal or complain
15. We issued an addendum in response to the COVID-19 pandemic; “Good Administrative Practice during the response to Covid-19”. The following points are relevant in this case:
• Basic record keeping is vital during crisis working. There should always be a clear audit trail of how and why decisions were made.
• The basis on which decisions are made and resources allocated, even under emergency conditions, should be open and transparent.
• Decision reasons should be clear, evidence based and where necessary explained in the particular context and circumstances of that decision.
• If you use new or revised policies and processes this should not lead to arbitrary decisions and actions. Ensure you have a clear framework for fair and consistent decision making and operational delivery.

Key facts

16. The Council emailed Mr X on 21 April saying the latest guidance meant he would not qualify for an exemption from business rates. Mr X responded saying the business is a commercial and residential property agency which accepts visiting members of the public and so should be classified as an estate agency. He said his business should be eligible for the Discount and the £25,000 RHL Grant.
17. The Council wrote to Mr X on 7 July saying his business was not entitled to receive a grant. The email provided general information about eligibility but did not specifically explain why Mr X’s business was not entitled to the RHL Grant. Mr X replied saying he believed that as an estate agency the business should be in receipt of The Discount. He asked the Council to reconsider its decision.
18. Mr X had a telephone conversation with a Council officer on 7 August. Mr X says the officer confirmed the Council had made a mistake and he was entitled to both The Discount and the RHL Grant.
19. On 8 September the Council wrote to Mr X confirming it had awarded The Discount from 1 April 2020 to 31 March 2021 and that he would receive a revised rates bill.
20. On 15 September the Council wrote to Mr X saying he was not entitled to receive a grant. The letter was similar in format to the refusal received on 7 July and did not give any specific explanation of why Mr X’s business was not eligible for the RHL Grant.
21. Mr X replied saying he had been awarded The Discount and had been advised on the telephone that he was entitled to the RHL Grant. He asked the Council to review the case as a matter of urgency.
22. The Council wrote to Mr X on 17 September saying that in order to consider his grant application, it required documentary evidence to confirm the premises are open to visiting members of the public. Mr X replied to the email asking what documentary evidence was required. He said he had already confirmed visiting members of the public come to the premises. He explained there is a ground floor reception which is open to the public during business hours with his business clearly identified.
23. The Council did not respond to Mr X’s request about what evidence it required. However, it did write to him on 13 October saying the Discount is not applicable and the RHL Grant not payable as the premises are openly advertised as “office space” for rent. It said it did not view the premises as being open to the public in the main and as per Government guidelines The Discount is only applicable for premises that are wholly or mainly used for visiting members of the public. It said appointments for clients do not constitute being open to the public in everyday circumstances.
24. Mr X replied the same day. He said he was struggling to understand the Council’s position on this matter. He explained an officer telephoned him on 7 August and explicitly said the Council had made an error in its initial decision and that the business was entitled to both The Discount and the RHL Grant. He said the government guidance was quite clear in identifying estate and lettings agents as eligible. He said the business is readily open to visiting members of the public between 9 am and 5 30 pm and they only require an appointment if someone wants to see a specific agent.
25. The Council replied on 22 October saying it sent a detailed response on 13 October regarding the rejections of The Discount and the Small Business Grants Scheme. It said its position was unchanged and the scheme was closed. Mr X replied saying the Council had previously asked him for documentary evidence to show the premises are open to visiting members of the public and it had not replied to his request for clarification of what evidence was required. Mr X questioned what evidence he could provide other than to confirm the business is open to the public with both a ground floor and first floor reception with clear signage for his business. He said the business was located in the centre of Birmingham so that it could be easily accessible to the public and convenient for public transport. He said that he knew a council officer had telephoned the office and was told the office was open to the public.
26. Mr X made a formal complaint to the Council. On 12 November the Council wrote to Mr X saying that if he provided evidence of the type of trading being carried out at the premises, it would look again at the decision to refuse The Discount and RHL Grant. Mr X explained the business only has one office from which agency and property management functions operate.
27. The Council responded on 2 December saying the information supplied did not confirm eligibility for The Discount or RHL Grant. It said the original grant scheme is now closed and could not accept new or review any previous applications. It said it was now accepting applications for a new grant scheme and provided details of how to apply.
28. Mr X contacted the Council again raising concerns about how the matter had been handled. He said the last communication from the Council was a request for further information which he supplied. He urged the Council to look at the matter again.
29. The Council wrote to Mr X on 18 December. It said it had previously explained that the premises are classed as offices and not for retail purposes and therefore, not eligible for The Discount. It said the decision was based on property details received from the Valuation Office Agency. It provided details of how to request a re-designation for retail purposes.
30. Mr X responded saying the Council was wrong and that he had applied for The Discount which covers more than just retail premises. He said that as he had clearly exhausted all avenues with the Council, he would now refer the matter to the Ombudsman.
31. I sent a draft of this statement to Mr X and the Council and invited their comments. The Council carried out a review of Mr X’s case. It said that while it does not dispute that Mr X’s business includes acting as estate and lettings agents, it does not accept that this is the whole or main function of the company. It says it reached this view after viewing the company website which lists many other business functions including office design and fit out consultancy, property investment advice, business rates advice, valuations, building consultancy and office and commercial cleaning. It says as a result of the many functions, the company is not eligible for The Discount as it is not wholly or mainly used as an estate or letting agency. If Mr X disagrees with this new decision, it is open to him to make a fresh complaint. This should be made to the Council first.

Analysis

32. Mr X complains the Council has wrongly refused his application for Expanded Retail Discount and the Retail, Hospitality and Leisure Grant. Mr X has to be awarded The Discount in order to qualify for the RHL Grant. I will therefore focus on the decision relating to The Discount.
33. Before March 2020, the previous scheme for rates relief expressly excluded estate agents. When the Government introduced the Expanded Discount Scheme in March 2020, this expanded eligibility into sectors not previously covered.
34. The Government Guidance says The Discount is for occupied hereditaments that are wholly or mainly used as shops. It goes on to define shops and includes hereditaments that are being used for the provision of services to visiting members of the public. In this section it specifically includes estate agents and letting agents. It therefore follows that an estate agent can receive The Discount so long as it meets the other criteria. The guidance also states that hereditaments not reasonably accessible to visiting members of the public are excluded.
35. The Council has provided different reasons for refusing The Discount in this case. On 13 October it said it was not payable because, as per Government guidelines, The Discount is only applicable to premises that are wholly or mainly used for visiting members of the public and appointments for clients do not constitute being open to the public in everyday circumstances. On 18 December the Council said the decision to refuse The Discount was based on property details received from the Valuation Office Agency.
36. The Government Guidance on The Discount does not say that eligibility is limited to properties in the rating list as “retail”. So a decision made on this ground would be fault.
37. I have considered how the Council considered the issue of accessibility. The guidance says businesses that are not reasonably accessible to visiting members of the public are excluded. It does not specify what reasonably accessible means. In one response to Mr X the Council took the view that visits by appointment would not be considered but the guidance does not make this differentiation. In response to my enquiries the Council has provided more information of the actual information it holds about Mr X’s business. When considering Mr X’s application for the RHL Grant and after awarding The Discount in August 2020, a council officer called Mr X’s business posing as a customer. The notes of the call say the business confirmed he could call into the office anytime during business hours.
38. A further note dated 13 October states that two officers considered the case and decided it is not open to the public. The note says that one officer had been to the building on a personal matter and had to make an appointment to get beyond the reception. The note does not indicate which business the officer visited at the building. The officers concluded Mr X’s business was not open to the public in the main and that it is more likely a base of operations or head office. The note said that even if the business allows someone to make an appointment this does not constitute open to the public in everyday circumstances. It concluded by saying The Discount should be removed.
39. On the basis of all the evidence I have seen I am not persuaded the Council properly reached a view on eligibility for The Discount and the RHL Grant. The Council has not reached a consistent reason for refusal and has misdirected itself if the decision is based on the wording on the rating list.
40. While the Council is correct to consider the issue of accessibility, I am not persuaded it has properly interpreted the guidance. The correct test is whether the premises are “reasonably” accessible to the public. It does not exclude access via appointment or give a requirement for the number of appointments against walk-in visits. The Council has not explained why it has given more weight to the anecdotal information provided by an officer as opposed to the objective evidence from the officer telephoning the business.
41. While it is not the Ombudsman’s role to take a view on whether Mr X’s business is eligible for The Discount and the RHL Grant and replace the Council’s decision, we must be satisfied the Council has properly considered all the available evidence and reached a balanced view based on that information. I am not persuaded the Council has properly explained why it does not accept the evidence provided about accessibility. In particular, the evidence of its own officer who posed as a customer and was told he could visit anytime during office hours. If this is the case it seems to me this would meet the criteria for the premises being reasonably accessible to members of the public. This failure to properly explain its reasoning is fault.
42. The Council’s communications with Mr X have been confusing and misleading. It has given different reasons for refusing The Discount. It has asked Mr X to provide more information and suggested it will review the decision only to then say the scheme is closed and the case cannot be reconsidered. I consider there is fault in how the Council has communicated with Mr X in this case. This has caused frustration and confusion and put Mr X to avoidable time and trouble in pursing the matter.

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Agreed action

43. To remedy the injustice caused to Mr X as a result of the fault in this case, the Council agrees, within one month of my final decision, to:

• Apologise to Mr X for any confusion caused; and
• Pay Mr X £350 to recognise his frustration and time and trouble in pursuing this matter.

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Final decision

44. I have completed my investigation with a finding of fault for the reasons explained in this statement. The Council has agreed to implement the actions I have recommended. These appropriately remedy any injustice caused by fault.

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Investigator's decision on behalf of the Ombudsman