Summary: Mr X complains the Council unfairly refused his application for a COVID-19 business grant because his home address is outside the Council area, and this caused financial hardship. The Council’s published grant criteria required businesses to be located in and operating within the council area and because Mr X is a market trader without a fixed business address his home address was used. There is no fault in the Council’s decision to refuse the grant as it based its decision on the published eligibility criteria.

The complaint

1. Mr X complains the Council unfairly refused his application for a COVID-19 business grant saying that while he operated in the area as a market trader his business was not located in the area.
2. Mr X says he has suffered financially as a result.

Back to top

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. 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”.
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)

Back to top

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 taken account of their comments in reaching my final decision.

Back to top

What I found

Additional Restrictions Grant Fund

7. 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).
8. The ARG funding scheme aimed to support businesses severely impacted by coronavirus restrictions and was a discretionary scheme. All businesses that were trading and met other eligibility criteria could apply to receive funding under this scheme.

Council’s Additional Restrictions Grant (closed) scheme

9. This scheme was aimed at businesses required to close under the national restrictions from 5 November to 2 December 2020. Eligible businesses were hospitality, hotel, bed and breakfast and leisure sectors, as well as non-essential retail, personal care facilities, entertainment and tourism venues, leisure and sports facilities which did not have a rateable value but had non-residential fixed cost of over £200 per month.
10. The policy stated the criteria that had to be met which included that the business must be located in and operating within Northumberland.

Key facts

11. Mr X is a market trader. He rents a unit from the Council at its market in Hexham. Mr X does not live within the boundary of Northumberland Council. He uses his home address as his business address because as a market trader he does not have a fixed business address.
12. Mr X applied for the ARG (closed). The Council declined the application on the basis that his business was not in an eligible category. Mr X contacted the Council to query this saying he was non-essential retail and was unable to trade as the market was closed. Mr X asked the Council to reconsider its decision as he believed he was eligible for this grant.
13. The Council wrote again to Mr X on 8 February saying it had reviewed the decision to decline his application. It explained the ARG (closed) was a discretionary scheme set up to support Northumberland businesses that otherwise would not receive support through the other COVID-19 business support schemes. It said the guidance notes for this discretionary scheme stated that all eligible businesses needed to “be located in and operating within Northumberland”.
14. The Council explained that while Mr X’s business operates in Northumberland, it is not located in Northumberland as evidenced by the principal address shown on his bank statement and invoices issued by the Council. The Council said therefore the decision to decline his application had not changed.
15. Mr X wrote to the Council again on 9 February saying he was disappointed with the decision and that he considered the Council was looking for reasons to say no. Mr X said he considered he was being discriminated against as he knew of other business owners who did not live in Northumberland that had been paid the grant. He stated he wished to make a formal complaint.
16. The Council responded to Mr X on 10 February. It said there is no appeals procedure included in the Government grant scheme. It said it had completed an internal review and that any further consideration would not result in a different outcome. It also said that it would not usually investigate a complaint where a decision-based review had been carried out. It said a review of the original decision had already been made and no fault found and so his complaint did not meet the criteria to be considered under the complaints process. The Council provided details of how Mr X could complain to the Ombudsman.

Analysis

17. Mr X applied for and was refused the ARG (closed). Mr X is unhappy with the decision and believes the Council should pay him because he trades within its area. Mr X considers he is being discriminated against because he lives in another council area.
18. The information provided shows the Council originally told Mr X he was not eligible for the ARG (closed) because he was not in an eligible category. Mr X is a market trader selling non-food items which would be considered non-essential retail. I consider the original reason for refusal was incorrect and amounts to fault. However, the Council did reconsider Mr X’s application and provided a new decision with different reasons for refusal.
19. The ARG (closed) is a discretionary scheme and the Council published the eligibility criteria. This clearly states that businesses must be located in and operating within the council area. The Council accepts Mr X operated his business within the council area but says it was not located in the area because his home address is in another council area.
20. In response to my enquiries, the Council says the criteria for its discretionary scheme was based on a set of principles agreed across seven local authorities in the North East. It says this was done to ensure a degree of consistency in the support businesses could access. It explains the approach taken was that for businesses such as market traders that do not have fixed business premises, the business base would be considered to be the residence of the applicant, irrespective of the location of the market.
21. The Council refused Mr X’s application because he lives outside the Northumberland Council area. While I appreciate Mr X is frustrated by this decision and believes he should be entitled to the grant because he trades at markets in Northumberland, I am satisfied the decision has been made in line with the published eligibility criteria and so I find no fault.
22. In response to my enquiries, the Council noted that other local authorities had taken a similar approach to it and so there may have been, or may still be, an opportunity for Mr X to seek support from the local authority in which he lives.
23. The Council also pointed out that to receive the ARG (closed) the applicant had to demonstrate they had ongoing fixed non-domestic costs of at least £200 per month which are integral to the running of their business. It said that nearly all market fees were not paid when the market was closed and so most market stall holders would not have received the grant as they would have been unable to demonstrate they had fixed costs that met the eligibility threshold.

Back to top

Final decision

24. I will now complete my investigation as there is no evidence of fault.

Back to top

Investigator's decision on behalf of the Ombudsman