Summary: Mr X complains the Council wrongly refused him a business grant, placing his business under financial risk. We find no fault in the Council’s decision making.

The complaint

1. Mr X complains the Council failed to award his business an Additional Restrictions Grant contrary to Government guidance, Council policy and the decisions of other councils. He says the lack of a grant has left his business in a financially risky position.
2. He also complains about the actions of a councillor.

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What I have investigated

3. I have investigated the complaint at paragraph 1 above. At the end of this decision I have explained why I have not investigated other matters.

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The Ombudsman’s role and powers

4. 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)
5. 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)
6. The law says we cannot normally investigate a complaint unless we are satisfied the council knows about the complaint and has had an opportunity to investigate and reply. However, we may decide to investigate if we consider it would be unreasonable to notify the council of the complaint and give it an opportunity to investigate and reply (Local Government Act 1974, section 26(5))
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 Mr X and I reviewed documents provided by Mr X and the Council.
10. I gave Mr X and the Council the opportunity to comment on a draft of this decision. I considered their comments before making a final decision.

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What I found

Additional Restrictions Grant

11. In November 2020 the Government introduced the Additional Restrictions Grant (ARG) to support businesses impacted by COVID-19 restrictions.
12. The Government published guidance to support councils in administering these grants. This encouraged councils to support businesses from all sectors that may have been severely impacted by restrictions but were not eligible for the Restart Grant scheme.
13. The Government suggested business areas councils could support but made clear this list was not directive. Rather, councils were to issue grants at their discretion, based on local economic needs.
14. Mr X has provided an extract from the website Gov.uk, dated from January 2021.
15. This said councils could decide which businesses to support. However, the Government encouraged councils to support those severely impacted by the restrictions and it suggested which businesses this may include.

Council policy

16. The Council has provided a copy of a report prepared in advance of a Cabinet meeting of 17 December 2020. This sets out the Council’s proposed policy on the ARG and reasons for this policy with reference to the Government guidance.
17. The Council proposed the following groups should be eligible to apply for the grant:
• Retail, hospitality and leisure supply chain and the events sector
• Non ratepayer businesses required to close
• In person businesses not required to close but who are severely impacted by restrictions
18. It said this was in line with the Government guidance on businesses to be targeted.
19. The Council also proposed local eligibility criteria, including:
• Businesses operating from residential premises will not be eligible to apply.
• Premises used solely for storage purposes will not be eligible.
• No other business group will be eligible to apply.
• Only businesses located in Haringey will be eligible to apply.
20. I note the Council did not set out reasons for this local criteria.
21. The Cabinet met and approved the proposed scheme.

Principles of good administrative practice

22. The Ombudsman publishes a guidance document setting out the standards we expect from bodies in jurisdiction. In May 2020 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.

What happened

23. On 18 December 2020 Mr X applied for a grant. He sought the Additional Restrictions Grant (“ARG”) however the Council had one form for application to all schemes.
24. Mr X chased the Council for a response on 25 January 2021.
25. On 8 February the Council told Mr X he was not eligible for one grant. Mr X then chased the outcome for the ARG.
26. Mr X chased the Council again on 20 February and on 22 February he made a complaint.
27. On 3 March the Council told Mr X he did not qualify for the ARG because its policy excluded those working from a residential property.
28. Mr X complained other councils had given grants to those working from a residential property. His business was in the retail, hospitality and leisure supply chain which both its policy and Government guidance was to support. He asked the Council to review its decision and award a grant.
29. The Council explained each council could devise its own policy and so it was not relevant that other councils had different policies. It supported those in the supply chain but excluded those working from a residential property. His business operated from a residential property and so he did not qualify for an ARG.
30. I asked the Council to explain its reasons for deciding “businesses operating from residential premises will not be eligible to apply” for the ARG. I also asked that it provide any records, dated 17 December 2020 or earlier, showing its reasons for excluding residential businesses.
31. In response to enquiries the Council said it did not hold any contemporaneous records of the decision making process. It explained it designed the scheme to provide some level of support to as many businesses as possible. The Government gave funds based on population numbers so those councils with a higher resident to business ratio had more scope to provide support. It used all funds through its approved scheme.
32. The Council added that it had since received further funding and run an extended scheme to support home based businesses. It noted the ARG scheme guidance and FAQs said grant payments should not be used as a wage support mechanism. And where councils included home based businesses or limited company directors in their schemes, grant payments were fairly minimal, as they could only be used to support fixed business related costs.
33. In comments on a draft of this decision Mr X said:
• The Council was slow to set up its extended ARG scheme which evidences its incompetence and poor decision making on the original scheme.
• The Council went against Government advice and decided to exclude home based businesses because it only wanted to support retail businesses.
• The councillor responsible for decision making was not qualified for the role.
• The Council admitted incompetence and negligence in its decision making by offering a local settlement.
• The Council is named as the most complained about council.

Findings

34. Councils had discretion to design their own ARG scheme, though they should have regard to the Government guidance. I note the Government guidance gave councils wide discretion on which businesses to support.
35. I cannot say the Council’s scheme was wrong, just because Mr X disagrees with it or because other councils had different policies. Rather I must consider whether the Council followed a proper decision making process in deciding on its own scheme.
36. The Council’s records show it designed a scheme while having regard to the Government guidance. It decided to support those in the retail supply chain as it considered this in line with the Government guidance. However, it also decided to exclude businesses working from a residential property. The Council did not record its reasons for this exclusion at the time.
37. While the Council had wide discretion to decide how best to operate its scheme, our Guidance on Good Administrative Practice makes clear we expect councils to have a rationale for their decisions and contemporaneous records of this. We would therefore expect the Council to have recorded reasons for excluding residential businesses. However, I have also taken into account the specific circumstances of this case. Councils had to devise a scheme at pace while their services faced unprecedented demand due to the COVID-19 pandemic. The Council’s records show it was aware of and considered the Government guidance. So, while its records were not to the standard the Ombudsman would usually expect, in the given context I consider this does not amount to fault. I therefore find no fault in how the Council set up its ARG scheme.
38. The Council explained to Mr X he was not entitled to an ARG under its policy as he operated from a residential property. While I recognise Mr X felt he would be supported as a supply chain business, the Council’s policy excluded him given his place of work. The Council applied its policy correctly and therefore I cannot find fault in its decision making.
39. I appreciate Mr X would have been anxious for the outcome of his grant application and he did spend time chasing the Council. However, I do not consider the delay of around two months so significant as to amount to fault.
40. That Mr X considers the Council was slow to set up its extended scheme is not evidence it failed to follow a proper decision making process in this complaint.
41. The employment history and qualifications of decision makers is not relevant to my decision. I have found no fault in the Council’s decision making process.
42. That the Council tried to resolve the complaint by offering a local settlement does not evidence it accepted fault or that it was at fault.
43. The number of complaints the Council receives has no bearing on my decision in this case.

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Final decision

44. I have completed my investigation. This is because I find no fault in the Council’s decision to refuse Mr X a grant.

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Parts of the complaint that I did not investigate

45. In his complaint to the Ombudsman Mr X criticised the actions of a councillor who he asked for help. However, the actions of the councillor in this respect are separate to those of the Council. I have not seen Mr X first raised a complaint to the Council about the councillor and so any investigation is premature. And it is unlikely any fault caused significant injustice to warrant investigation.
46. I have not investigated Mr X’s complaint the Council was slow setting up its extended ARG scheme because this is premature.

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Investigator's decision on behalf of the Ombudsman