Summary: Miss X complains about the Council’s decisions to refuse rates relief and a grant to her business, causing stress, time and trouble and a negative financial impact. We find no fault in the Council’s decision making but find it at fault for delay in responding to Miss X. We recommend it provides an apology and payment for time and trouble.

The complaint

1. Miss Y complains on behalf of Miss X that:
• the Council refused to class Miss X’s business as “retail” or provide rates relief in January 2020, and
• the Council then refused to provide rates relief under the Expanded Retail Discount and refused the associated Retail, Hospitality and Leisure Grant.
2. Miss Y says Miss X has suffered stress, time and trouble and a negative financial impact to her 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. We cannot investigate late complaints unless we decide there are good reasons. Late complaints are when someone takes more than 12 months to complain to us about something a council has done. (Local Government Act 1974, sections 26B and 34D, as amended)
6. 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, or the injustice is not significant enough to justify our involvement. (Local Government Act 1974, section 24A(6), as amended)

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”.
8. 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

9. I spoke to Miss Y and I reviewed documents provided by Miss Y and the Council.
10. I gave Miss Y and the Council the opportunity to comment on a draft of this decision. I considered any comments before making a final decision.

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What I found

Retail rates relief

11. In 2018 the Government introduced retail rates relief to support businesses in the years 2019-20 and 2020-21. In November 2018 it issued guidance to councils on how to apply this “Retail Discount Guidance”.
12. The relief was available to businesses used wholly or mainly as shops, restaurants, cafes and drinking establishments. This was further defined as properties used for the sale of goods, supply of services, or sale of food or drink to visiting members of the public.
13. The guidance listed the types of business included. However, this was a guide only and it was for councils to decide if a business was broadly similar in nature to those listed and so eligible.
14. The guidance also listed the types of business not included. However, it explained this was a guide only and it was for a council to decide if a business was broadly similar in nature.

Expanded Retail Discount (the “Discount”)

15. In 2020 the Government increased the availability of retail rates relief, in response to the COVID-19 pandemic. In April 2020 it published guidance for councils on how to apply this discount; “Business Rates, Expanded Retail Discount 2020/21: Coronavirus Response Local Authority Guidance”.
16. Each council was to adopt its own scheme and decide whether to grant the Discount, having regard to the guidance.
17. The Discount applied to businesses used wholly or mainly:
• as shops, restaurants, cafes, drinking establishments, cinemas and live music venues;
• for assembly and leisure; or
• as hotels, guest & boarding premises and self-catering accommodation.
18. Shops, restaurants and cafes were further defined as properties used for the sale of goods, supply of services, or sale of food or drink, to visiting members of the public.
19. The guidance listed the types of business included under each definition. However, this was a guide only and it was for councils to decide if a business was broadly similar in nature to those listed and so eligible.
20. The Government considered the following were not eligible for the Discount:
• Properties used for the provision of the following services to visiting members of the public:
1. Financial services (e.g. banks, building societies, cash points, bureaux de change, short-term loan providers)
2. Medical services (e.g. vets, dentists, doctors, osteopaths, chiropractors)
3. Professional services (e.g. solicitors, accountants, insurance agents financial advisers)
4. Post office sorting offices
• Properties not reasonably accessible to visiting members of the public.
21. Again, it was for a council to decide if a business was broadly similar in nature and so ineligible.

Council’s scheme on the Discount

22. In response to enquiries the Council confirmed it did not create its own scheme rather it adopted and applied the Government guidance.

Grant Funding Schemes

23. In response to the COVID-19 pandemic the Government introduced two grant schemes to support businesses. In March 2020 the Department for Business, Energy and Industrial Strategy published guidance for councils on how to apply these: “Grant Funding Schemes”.
24. Businesses which, on 11 March 2020, were eligible for Small Business Rates Relief (“SBRR”) could be eligible a Small Business Grant (“SB Grant”) of £10,000.
25. Businesses which, on 11 March 2020, were eligible for the Expanded Retail Discount, could be eligible for a Retail, Hospitality and Leisure Grant (“RHL Grant”) grant of up to £25,000.

What happened

26. Miss X says the Council refused to apply retail rates relief to her business in January 2020. She says she complained to the Council about this at the time but received no further response.
27. I asked the Council for copies of its previous decisions on retail rates relief. It provided documents dating from April 2020, with no reference to an earlier decision. I also asked Miss Y to provide copies of correspondence exchanged between Miss X and the Council from January 2020 to August 2020. She provided documents dating from April 2020.
28. I have taken the following key points from the documents provided by Miss Y and the Council.
29. On 8 April 2020 Miss X contacted the Council seeking the Discount and RHL Grant.
30. On 18 April the Council sent out a general email to all applicants including Miss X. It said it had processed most payments but applicants should contact the Council if they did not receive a payment as expected or had any queries.
31. The Council says Miss X contacted it by phone on 20 April to complain about its refusal to award her the Discount and RHL Grant.
32. On 29 April the Council responded to Miss X. It explained:
• Her business was not eligible for the Discount or RHL Grant.
• Government guidance said a business should be wholly or mainly used for a qualifying purpose.
• In this case, her business would have to be wholly or mainly used for the sale of goods to visiting members of the public. It took this to mean 51% or more of the business should be used for this purpose.
• The business’ website showed it was mainly a car repair service. That meant the property was a workshop or premises, which matched the description on the Valuation Office Agency (“VOA”) rating list.
• The business was not wholly or mainly used for the sale of goods to visiting members of the public.
33. On 6 May Miss X asked the Council to review its decision.
34. In July Miss X chased a response from the Council and provided a supporting statement from an industry body. This said:
• Its members sold products direct to customers and were therefore “retail”.
• It was similar to a shoe repair shop which was an eligible business.
• It was also similar to a domestic appliance repair shop. These also had a customer reception and then a work area that customers could not access, like Miss X’s business.
• It was similar to a car hire business as Miss X would sometimes offer a complementary car pending repairs to a customer car.
• Other councils awarded the Discount and RHL Grant to members.
• It was a retail business but with a large area for service and maintenance.
• While some services were provided safely away from customers, customers could also make direct purchases.
35. I have not seen any evidence the Council responded to Miss X’s review request.
36. On 19 August 2020 Miss Y applied for the Discount on behalf of Miss X. She explained the business was a body shop and sold parts to the public. She provided photos of the property and a link to the business’ website.
37. The Council responded on 16 September, refusing the request. In summary it said:
• The VOA described the business as a workshop and premises. This did not fall within the Government guidance for awarding a Discount and RHL Grant.
• A business must be wholly or mainly used for retail purposes. This means 51% or more.
• None of the area was attributed as ‘retail’ by the VOA.
• The business’ website sets out the services the business provides. It did not deny there was a retail element to the business.
• However, businesses that were not reasonably accessible to visiting members of the public were not eligible for the relief.
• This included properties deemed a ‘workshop and premises’ where there was no retail element or the retail element was below 51%.
38. Miss Y asked the Council to reconsider its decision. She explained:
• The main part of the business was selling parts and servicing vehicles for members of the public. Over 51% of the business was selling and offering services to the public which could be proved by sales figures.
• There were probably several health and safety concerns with customers being allowed to wander freely through a workshop.
• Similar to most shops, customers could not visit the whole site. Lots of shops had large stockrooms but a small trade area for customers yet were still classed as retail.
• The Government guidance did not say only shops could get retail relief.
• The website showed the business as selling body parts and servicing vehicles, both of which qualified it as a retail business.
39. The Council further explained:
• The business was not used to provide one of the services listed in the Government guidance.
• It was not a shop, restaurant, or café.
• The VOA listed it as a ‘workshop and premises’.
40. Miss Y wrote to the Council again. In summary she said the business was mainly servicing vehicles and selling parts to the public, covering two areas of retail relief: selling products and servicing. Therefore, it should qualify.
41. The Council confirmed it had nothing to add.
42. Miss Y wrote to the Council again. She said:
• The VOA description was not relevant.
• All of the property was used for customer service area, space to provide the service and storage for any of the products sold. Customers had to come to the site (including passing trade) to do face to face business and make payments.
43. The Council said it considered eligibility based on the VOA description. The VOA reported 90% of the business was a workshop. Therefore, the business was not eligible for the Discount.
44. Miss Y complained the Council had not properly considered the evidence provided or properly applied the Government guidance. The guidance did not refer to the VOA rating list.
45. The Council referred Miss Y to its previous response.
46. Miss Y complained further. The Council had said more than 51% of the business’ floor space should be retail but that was not a relevant rule. The Council also said the VOA must describe the business as retail but that too was not a relevant rule.
47. The Council further explained:
• Businesses undertaking vehicle repairs and similar were not deemed by the Government to be “retail” businesses and so not eligible for the Discount or RHL Grant.
• The business was not eligible previously and Miss X did not challenge this previously.
• While there may be a mixed use at the site, with part being used as a reception, it was clear the vast majority (90%) of the assessment existed as a “workshop and premises”. This gave a clear indication of the nature of the business and the extent of the use for a qualifying purpose.
• Having weighed-up all the relevant facts and information it could not agree to her request.
48. In response to enquiries the Council provided a screenshot of information produced by the VOA. I note this reports 190sq/m of the business premises is a workshop and 21sq/m is an office.
49. The Council said:
• The VOA business rates band and assessment was just part of determining if the property was ‘wholly and mainly’ used as a shop.
• The Government guidance did not include workshops or vehicle repair sites. 90% of the premises was a workshop.
• It did not consider vehicle repair was broadly similar to any of those business listed in the Government guidance.
• A photo of the business showed only staff could enter the workshop area.
• The business was similar to those not eligible for the Discount because it provided a professional service and was not reasonably accessible to visiting members of the public.
• The sales part of the business had no part in its decision. This was because the Government guidance referred to properties ‘wholly and mainly‘ used for the qualifying purpose.
• The business’ website outlined their services as professional paint refinishers.
• 90% of the premises was used for a professional service where you may expect to be consulted before receiving that service. And 90% of the premises was not ‘reasonably accessible to visiting members of the public’.

Findings

50. We do not usually investigate complaints about matters that arose more than 12 months before a complainant contacted us. However, Miss X’s complaint that the Council refused retail rates relief in January 2020 was closely linked to her recent complaint and any injustice would be ongoing. I therefore considered there were good reasons to investigate. However, at this stage neither Miss Y nor the Council have been able to provide me with relevant documents. And, given my findings below, it is unlikely I would find fault causing significant injustice. I therefore do not intend to continue my investigation into this part of the complaint.
51. A business must qualify for the Discount to be eligible for the associated RHL Grant.
52. The Government issued guidance for councils to follow in applying the Discount. The Council could have adopted its own policy but in this case it directly applied the Government guidance.
53. It is up to each council how they interpret and apply the Government guidance. Therefore, different councils may reach different decisions. This does not necessarily mean the Council is at fault.
54. I cannot question whether the Council’s decision is right or wrong simply because Miss X disagrees with it. I must consider if there was fault in the way the Council reached its decision.
55. Having reviewed the extensive correspondence exchanged, I am satisfied the Council considered all the information provided, took account of and applied the Government guidance and reached an evidence based and reasoned decision. The Council understood most of the property was used for repairs or refinishing and that this area of the property was not accessible to the public. It acknowledged part of the property was used for sales to the public but found the property was not wholly or mainly used for this purpose. It therefore decided Miss X’s business was not a shop that was reasonably accessible to members of the public and so it was not eligible for the Discount or associated RHL Grant. I find no fault in the Council’s decision making.
56. However, I find the Council at fault because it did not respond to Miss X’s request for a review, of 6 May 2020, or her further emails chasing a response. I find Miss X was put to avoidable time and trouble as a result. While I recognise councils were under increased pressure, Miss X did not hear from the Council from May to September 2020, which is a significant delay.

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Agreed action

57. To remedy the injustice set out above I recommend the Council carry out the following actions within one month of the date of my decision:
• Provide Miss X with an apology.
• Pay Miss X £100 for time and trouble.
58. The Council has accepted my recommendations.

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Final decision

59. I find no fault in the Council’s decision making but I find it at fault for delay in responding to Miss X. The Council has accepted my recommendations and I have completed my investigation.

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Investigator's decision on behalf of the Ombudsman