Summary: Mr X complains the Council was wrong to refuse him a business grant, causing stress and financial difficulty. We find no fault in the Council’s decision making process.

The complaint

1. Mr X complains the Council wrongly refused him a business grant causing stress and financial difficulty.

Back to top

The Ombudsman’s role and powers

2. 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)
3. 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)
4. 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)

Back to top

How I considered this complaint

5. I spoke to Mr X and I reviewed documents provided by Mr X and the Council.
6. I gave Mr X and the Council the opportunity to comment on a draft of this decision. I considered any comments before making a final decision.

Back to top

What I found

Grant Funding Schemes

7. 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).

8. Funding was payable to the person recorded by the council 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 11 March was inaccurate, it could withhold or recover the grant and take reasonable steps to identify the correct ratepayer.
9. Councils were to ignore any changes to the rating list (rateable value or to the hereditament) after 11 March 2020, including backdated changes, for the purposes of eligibility. However, in cases where it was factually clear to the council on 11 March that the rating list was inaccurate on that date, it could withhold the grant and/or award the grant based on its view of who would have been entitled to it.

Small Business Grant

10. Businesses which, on 11 March 2020, received Small Business Rates Relief (“SBRR”) were eligible for a Small Business Grant (“SB Grant”) of £10,000.
11. Properties that were not eligible for SBRR were excluded from accessing the SB Grant.
12. Eligible recipients were entitled to one grant per property.
13. SBRR applies to occupied businesses.
14. GOV.UK says you can get small business rate relief if:
• your property’s rateable value is less than £15,000 and
• your business only uses one property.
15. If you get a second property, you can keep getting any existing relief on your main property for 12 months.
16. You can still get small business rate relief on your main property after this if both the following apply:
• none of your other properties have a rateable value above £2,899
• the total rateable value of all your properties is less than £20,000 (£28,000 in London)

Retail, Hospitality and Leisure Grant

17. Businesses which, on 11 March 2020, were eligible for the Expanded Retail Discount (the “Discount”) were also eligible for a Retail, Hospitality and Leisure Grant (“RHL Grant”) of up to £25,000.
18. The Government published guidance for councils on how to apply this Discount; “Business Rates, Expanded Retail Discount 2020/21: Coronavirus Response Local Authority Guidance” April 2020.
19. 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 and boarding premises and self-catering accommodation
20. 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.

Valuation Office Agency (“VOA”)

21. The 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 maintains lists detailing the rateable value of 1.9 million commercial properties for business rates: the rating list.

What happened

22. On 11 March 2020 the Council recorded a third party as the ratepayer at Property A. On 3 April the third party told the Council Mr X bought Property A, B and C on 1 April 2020.
23. On 22 April Mr X applied to the Council for a grant for his business at Property A. On the application form he said he was a sole trader.
24. The Council refused a grant. It explained grants were payable to the ratepayer occupying the property on 11 March. Mr X had previously told the Council Property A was empty and a third party said he purchased Property A on 1 April. As it had contradictory information it could not accept he was the occupying ratepayer on 11 March. However, he could provide further information for consideration.
25. Mr X then told the Council he had occupied Property A, B and C since 5 February 2020. He was converting properties B and C to flats but Property A remained as a shop.
26. The Council further explained grants were only payable to the ratepayer. Therefore, Mr X would first have to register to pay business rates. And, as he did not register for rates at the time he took up occupation, he now had to provide evidence of occupation. This should include business insurance, evidence of stock, utility bills and bank statements.
27. Mr X did not provide the information requested.
28. On 19 August the Council told Mr X the VOA had removed Property A, B and C from the rating list as the VOA had understood he was converting all three properties into flats. The Council again asked Mr X to provide evidence he was trading from Property A or that it was stocked on 11 March 2020. It needed evidence of occupancy on 11 March by way of receipts, photos, or invoices. Further, that Mr X should provide this before the grant scheme closed on 28 August 2020. On the same date the Council asked the VOA to rate Property A.
29. Mr X then sent the Council a copy of the plans for Property A and a utility bill.
30. On 20 August the Council refused a grant as Mr X had not met the criteria. He had not provided evidence of trading; the utility bill did not evidence trading. Further, its officer had visited Property A on 20 August and considered the shop appeared to have been empty for some time.
31. Mr X then told the Council he used the shop at Property A for storage and provided photos in support.
32. On 3 September the Council told Mr X it was satisfied he occupied Property A. It explained he was not eligible for the Discount or RHL Grant because the shop was used for storage. And Property A was not eligible for SBRR and so he was not eligible for the SB Grant. SBRR was only payable on one property and he already received SBRR on another property.
33. Mr X said he had two separate businesses at two different properties and so he thought each could get a grant.
34. The Council explained a business had to be eligible for SBRR to get the SB Grant. Property A was not eligible for SBRR as this was only applicable to one property at a time. Further, a property had to be wholly or mainly used as a shop to get the Discount and RHL Grant. However, it was used for storage.
35. Mr X said he needed Property A to store his tools but also for use as a building workshop.
36. The Council explained the Discount was only available to businesses used for retail, hospitality and leisure and that were readily accessible to members of the public as per the Government guidance. From the photos seen his business was not readily accessible to the public and so did not qualify. He remained liable to pay business rates.
37. Mr X said he would not pay business rates as he had not received a business grant.
38. Mr X and the Council exchanged further correspondence, with Mr X maintaining he was entitled to the grant. He pointed to Government guidance which said one grant was payable per property.
39. The Council further explained it could not consider SBRR for Property A as both of Mr X’s businesses were trading in his name, rather than as separate limited companies. And, only one of his properties could be eligible for SBRR.
40. On 23 December Mr X told the Council Property A was also now used as an office.
41. In January 2021 Mr X complained to the Council about the lack of support it had offered.
42. In response, the Council maintained its decision to refuse a grant to his business at Property A was correct. Mr X had two businesses but they were both trading in his sole name and so were treated as one business when considering SBRR. SBRR was awarded to the property with the higher rateable value so in this case it was awarded to the other business. Property A did not benefit from SBRR and so was not eligible for the SB Grant. To qualify for the Discount and RHL Grant Property A must be used as a shop. As the property was used for storage and as a workshop it did not meet the criteria for this either.
43. Mr X complained to the Ombudsman. He said his other business was a partnership registered under his name and a third party. Therefore, this was a separate business and so Property A was eligible for SBRR and the SB Grant.
44. In response to enquiries the Council provided a copy of Mr X’s application for a grant for his other business. This shows he told the Council he was a sole trader in respect of this business. The Council said it had no information to suggest this business was a partnership registered under two names.
45. Mr X provided late comments on my decision. He said:
• He received a business rates bill in 2019;
• Gov.uk says each property is entitled to a grant if you have more than one property;
• He told the Council he used Property A for storage but also as a workshop; and
• He did not understand why he had to pay business rates on Property A if it did not qualify as a business.

Findings

46. It is not my role to consider the information provided and reach my own decision on whether Mr X is entitled to a grant. Rather my role is to investigate whether the Council reached its own decision properly. I can consider if the Council followed a proper decision making process; that is whether it took account of relevant information, law, policy and guidance before reaching its decision. I can only consider what the Council knew at the time it decided. I cannot find the Council at fault if new information has since come to light that it was previously unaware of.
47. The Council initially refused Mr X a grant for his business at Property A as he was not the recorded ratepayer on 11 March 2020. I am satisfied the Council’s decision was in line with the Government guidance.
48. The Council then gave Mr X opportunity to prove he occupied Property A on 11 March and should be recorded as the ratepayer. Once Mr X provided evidence of occupation the Council considered if he met the other criteria for grant eligibility.
49. The Council considered the information provided by Mr X. It found Property A was not entitled to SBRR because Mr X already received SBRR on another property. As Property A was not eligible for SBRR, it was not eligible for the SB Grant. The Council therefore refused a SB Grant in line with the Government guidance.
50. At the time of deciding, the Council held information that Mr X ran both of his businesses as a sole trader. This meant it treated both Property A and his other property as being part of the same sole trader business. And, only one property belonging to this business could benefit from SBRR. I have not seen any evidence Mr X told the Council that one of the businesses was a partnership. I therefore cannot say the Council was aware of this at the time it decided and then failed to take this into account.
51. Mr X believes he is entitled to one grant per property however the Council has explained Property A does not meet the eligibility criteria because it does not receive SBRR. Government guidance makes clear the SB Grant is only payable if the property receives SBRR.
52. I am satisfied the Council considered relevant information, law and guidance in reaching its decision to refuse Mr X SBRR and the SB Grant. I therefore find no fault in its decision making.
53. The Council considered that Property A was used for storage and as a workshop. It found this was not a qualifying retail, hospitality or leisure use under the Government guidance. Therefore, it decided Property A was not eligible for the Discount or the associated RHL Grant. I am satisfied the Council considered relevant information, law and guidance in reaching this decision. I therefore find no fault in its decision making.
54. I will not investigate why Mr X may have received a business rates bill for Property A in 2019 as this was not part of his complaint to the Council and because any fault would not affect my decision. This is because, upon evidence, the Council accepted Mr X was the correct ratepayer for Property A for the purposes of considering his eligibility for a business grant.
55. The Council found Property A was not eligible for business rates relief or a business grant. That does not mean business rates are not payable, only that the criteria for a discount on those rates has not been met.

Back to top

Final decision

56. I find no fault in how the Council decided on Mr X’s request for a business grant. I have completed my investigation.

Back to top

Investigator's decision on behalf of the Ombudsman