Summary: Mr X complained the Council failed to process his application for a Small Business Grant before the deadline of 30 September causing his business financial hardship. Mr X sent all requested information before the deadline but the Council did not deal with it until 8 October. While this delay is fault, the Council has remedied the injustice caused by making a payment of £10,000 to Mr X.

The complaint

1. Mr X complains the Council failed to process his application for a Small Business Grant before the deadline of 30 September 2020.
2. Mr X says his business missed out on a grant it was entitled to causing financial hardship.

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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 may investigate matters coming to our attention during an investigation, if we consider that a member of the public who has not complained may have suffered an injustice as a result. (Local Government Act 1974, section 26D and 34E, as amended)
5. 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

6. 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 invited their comments.

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What I found

7. 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”.

Small Business Rate Relief

8. Small business rate relief (SBRR) is applied if business premises have a rateable value of less than £15,000 and, in most cases, if the business uses only one property.
9. If relief is applied, then any business with premises with a rateable value of less than £12,000 will pay no business rates.

The Small Business Grant Fund

10. In March 2020, in response to the COVID-19 pandemic, the government created schemes for councils to pay grants to small businesses. These included the Small Business Grant Fund (SBGF).
11. To receive funding from the SBGF a business had to be in receipt of small business rate relief (SBRR) (or rural rates relief) on 11 March 2020. Eligible businesses would receive a grant of £10,000.

Additional Restrictions Grant Fund

12. On 31 October 2020 the government announced that national restrictions would be reintroduced. Enhanced business support settlements that had previously been provided to areas entering Tier 3 restrictions were extended and formalised into the Additional Restrictions Grant (ARG).

Key facts

13. Mr X’s landlord contacted the Council in February 2020 saying Mr X’s business had occupied the property since 13 January 2020 and so was liable for the business rates. The Council raised a business rates account and wrote to Mr X on 11 March 2020. It included an application for Mr X to apply for small business rate relief.
14. Mr X told me that due to the COVID-19 pandemic, the staff in the London office of his business were furloughed and so he did not see the business rates notification until September 2020 when he applied immediately for the small business rates relief. Mr X returned the application to the Council on 7 September and it processed this application on 15 September.
15. A council officer called Mr X on 15 September and said that in order to consider eligibility for the SBGF he should provide proof the business is trading and that he had paid rent. Mr X provided the evidence to the Council on 25 September.
16. The Council emailed Mr X on 9 October saying it had set up the business rates account from 13 January 2020 and applied small business rates relief. It also said the Government had closed the grant fund on 30 September and there was no appeal or review process.
17. In response to Mr X’s further email about the refusal of the SBGF the Council said that it received his further information on 25 September but there was insufficient time to process it as the scheme closed on 30 September. It said the Council had no discretion to review the grant payments and there was no right of appeal.
18. In response to my first draft decision on this complaint, the Council said that further guidance issued by government in March 2021 allowed it to use money from ARG funding to prioritise businesses that were unable to access other grant schemes. As a direct result of this guidance, the Council made a payment of £10,000 to Mr X.

Analysis

19. Mr X complains about the Council’s failure to pay the SBGF. Mr X says he provided all the information requested before the deadline of 30 September and that the Council failed to process the information in time.
20. The closing date for applications for the SBGF was 31 August 2020 but councils were able to pay business grants up to 30 September. The Council accepted Mr X’s late application and never explained to him that if it was unable to process the application by 30 September it would not be paid even if he was eligible. The failure to provide full information about the application and payment deadlines was fault.
21. Mr X provided all necessary information before that deadline, but the Council failed to process it. I do not criticise the Council for accepting applications after 31 August in order to award as many grants as possible. I also appreciate that while the Council was dealing with extra work as a result of the COVID-19 pandemic its failure to process the grant was not deliberate. However, this service failure caused Mr X’s business to miss out on a grant it was entitled to. This was an injustice to Mr X’s business.
22. However, further government guidance issued in March 2021 means the Council has been able to rectify this situation and pay Mr X £10,000 as part of the ARG funding. I consider this puts Mr X back in the position he would have been in but for the Council’s fault. As a result there is no basis for me to recommend any further action by the Council as it had remedied this complaint.
23. I have also been provided with information by the Council which shows it has made similar payments to other businesses where grant applications were not processed in time.

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Final decision

24. I will now complete my investigation as a suitable remedy for Mr X’s injustice has been provided.

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Investigator's decision on behalf of the Ombudsman