Summary: Mrs X complained the Council wrongly refused her a business grant, withdrew a business rates credit in error and handled her complaints poorly. She said she suffered financial loss, distress, time and trouble. We found the Council at fault. We recommended the Council provide Mrs X with an apology, £150 for time and trouble, £150 for distress, £10,000 for the missed grant and act to prevent recurrence.

The complaint

1. Mrs X complains the Council:
• wrongly refused a business grant to her business, Company B.
• removed a business rates account credit due to Company B in error and;
• handled her complaints poorly.
2. Mrs X says she has suffered financial loss, stress, time and trouble.
3. Mrs X also complains about the Council’s actions regarding another business, Company E and, that the Council breached data protection law.

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What I have investigated

4. I have investigated the complaint at paragraphs 1 and 2 above. At the end of this decision I have explained why I will not investigate complaints about Company E or data protection issues.

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The Ombudsman’s role and powers

5. 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)
6. We provide a free service, but must use public money carefully. We do not start or may decide not to continue with an investigation if we decide there is another body better placed to consider this complaint. (Local Government Act 1974, section 24A(6))
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 Mrs X and I reviewed documents provided by Mrs X and the Council.
10. I gave Mrs X and the Council an opportunity to comment on my draft decision. I considered their comments before making a final decision.

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What I found

Liability for business rates

11. The Local Government Finance Act 1988 (LGFA 1988) identifies three categories of ratepayer:
• occupiers
• owners, and
• persons named in central rating lists.
12. Case law says the four conditions of rateable occupation are:
• actual occupational possession
• exclusive occupation or possession
• occupation or possession which is of some value or benefit to the occupier/possessor
• occupation or possession which has a sufficient quality of permanence.
13. The case law on rates liability is highly technical. It is for a council to decide who is the correct liable ratepayer. However, the Ombudsman can consider if a council has followed a proper decision making process.

Grant Funding Schemes

14. 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”.
15. Of relevance to this case, businesses which on 11 March 2020 were eligible for Small Business Rates Relief (SBRR) were eligible for a Small Business Grant of £10,000.
16. Funding was payable to the person recorded 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, they could withhold or recover the grant and take reasonable steps to identify the correct ratepayer.

Council Complaints process

17. The Council has provided a copy of its August 2020 complaints policy. This explains it has a three stage complaint process.
• Stage one: A service review with Head of Service responsibility.
• Stage two: A review with Chief Executive responsibility. If you are not happy with the outcome of your stage 1 complaint, if you have a further complaint, or the complaint is of a more complex nature, for example regarding the conduct of an individual employee, further investigation will be required and the matter will be investigated by the Chief Executive’s Office.
• Stage three: Ombudsman
18. It will usually respond within 10 working days at stage 1 and 2, but complex matters may take longer.

Principles of good administrative practice

19. In 2018 the Ombudsman published a guidance document setting out the standards we expect from bodies in jurisdiction “Principles of Good Administrative Practice”. The following points are relevant in this case.
• Taking reasonable, timely decisions, based on all relevant considerations
• Stating the criteria for decision making and giving reasons for decisions
• Ensuring decisions and actions are proportionate, appropriate and fair
• Having clear and accessible appeal routes
• Putting mistakes right quickly and effectively
• Operating an effective complaints procedure, which includes offering a fair and appropriate remedy when a complaint is upheld
20. We issued an addendum in response to the COVID-19 pandemic; “Good Administrative Practice during the response to Covid-19”. This shows we expected similar standards from councils, even during crisis working.

What happened

21. I have only referred to matters relevant to this investigation. I have not included any complaints related to Company E or complaints about data protection.
22. On 11 March 2020 the Council recorded Company B as the ratepayer at the Property. Company B was in receipt of SBRR.
23. In April 2020 Mrs X applied for a business grant for Company B at the Property.
24. In June Mrs X’s MP chased the Council for a response on her behalf.
25. The Council replied, explaining the business rates team was dealing with grant applications as quickly as possible but there may be delays due to the volume and complexity of work. It would address the complaint within 15 days.
26. Mrs X remained unhappy as it had been many weeks since she applied and others had got grants.
27. The Council further explained it was awaiting third party information before it could decide on her application.
28. Mrs X continued to chase the Council and asked what information it was awaiting.
29. On 26 August the Council explained to Mrs X that where grant eligibility was not clear it needed to carry out further checks. It had been completing these checks in line with Government guidance. It went on to explain its queries and concerns regarding third parties neighbouring the Property. It also confirmed it was still carrying out checks regarding Company B.
30. Mrs X complained the Council had raised issues that were not relevant to Company B. Mrs X’s MP also chased the Council again on her behalf.
31. The Council responded on 23 September 2020. In respect of Company B, it explained in carrying out checks it found it held information that said a third party occupied the Property and it had now made that third party liable for rates on the Property.
32. On 30 September Mrs X told the Council she previously gave it incorrect information about the occupant of the Property but this was resolved in August 2019. The Council had then issued bills to Company B thereafter. She said if the Council had any issue with this it should have raised it then. It also could have told her this sooner in response to her grant application to allow her to clarify. She asked if it would now pay Company B the grant as the correct occupant of the Property.
33. The Council told Mrs X it took time to deal with queries, including gathering information from third parties between April and July 2020. In respect of Company B, it repeated its previous response; that it held information showing a third party occupied the Property.
34. On 11 November Mrs X complained to the Chief Executive:
• The Council had not told her the issues with her grant application or asked her for further information until after the scheme closed (in August 2020).
• The Council had recorded Company B as ratepayer and issued it bills since 2019, she therefore queried why it only now had an issue.
• There was no reason for the Council to take so long on this matter.
• The Council had raised matters irrelevant to Company B.
• She felt the Council officer involved was acting with bias or had some other personal reason for not wishing Company B to receive the grant.
35. On 27 November the Council told Mrs X the Director of Corporate Services, rather than the Chief Executive, would respond to her complaint as he had access to the records. It further explained it would respond at stage 1 due to the new matters raised.
36. On 13 December Mrs X complained:
• She had received an email from the Council that it was passing her complaint to an officer to respond, despite her complaining about the conduct of that same officer.
• She expected the complaint to be dealt with by the Chief Executive at stage 2 in line with its complaints policy.
• The Council had delayed in responding to her complaint.
• The Council had removed a credit from the business rates account of Company B and applied this to a third party account.
37. On 15 December the Director of Corporate Services replied to the complaint of 11 November. The Council explained again it had previously made an error recording Company B as the ratepayer at the Property. Upon reviewing documents it had corrected this. It enclosed these documents, namely emails between Mrs X and the Council dated July 2019 confirming a third party was now in occupation of the Property. The Council said it was incorrect to say an officer had taken her personal views into account, rather she had decided correctly in line with the scheme guidance.
38. On 18 December the Director suggested Mrs X’s complaints of 13 December were likely being dealt with by another officer.
39. On 4 January 2021 Mrs X confirmed the complaint of 13 December was for the Director to address and set out the matters still not addressed.
• She explained again she gave the Council further information in August 2019 and it then made Company B the ratepayer at the Property. She again questioned why it had since changed its view on this.
• Company B had a credit on its rates account for the Property but the Council appeared to have now applied this credit to a third party. She asked the Council to explain this theft.
• She asked why it took the Council six months to tell her the outcome of her grant application.
• She complained again the Council had raised matters unrelated to Company B.
• She asked why her complaint was not dealt with at stage 2 given she was unhappy with how her complaint was handled, it was complex, and it was about the conduct of an employee.
• She asked why the Council passed the complaint to the initial Council officer to reply.
40. The Council told Mrs X:
• It was usual for the officer involved to respond to a complaint first, and it had not suggested it would do otherwise.
• Upon her grant request it reviewed correspondence of July 2019 and corrected its error regarding the ratepayer; removing Company B as ratepayer.
• It had queries about her claim and other related third parties so carried out further checks.
• She raised some new issues so it dealt with this at stage 1.
41. On 28 January 2021 the Council spoke to Mrs X by phone to discuss her complaint, though it has no record of this call.
42. On 7 February Mrs X sent the Council:
• A lease agreement to show Company B was the tenant of the Property since March 2019;
• A rates bill issued to Company B for the Property, in October 2019, showing the account in credit by £161 and;
• A bill issued to a third party in October 2020 showing their account received a credit for £161.
43. She said this supported her assertion that she told the Council in August 2019 that Company B occupied the Property. She asked for Company B to be named as the ratepayer for the account again and its credit returned. She felt she had still not received a response as to why it took the Council so long to deal with her grant request. She also enclosed the email confirming the Director would be dealing with her complaint which is why she was concerned to then hear the initial officer was still involved.
44. The Council told Mrs X that following receipt of the tenancy agreement it would rebill Company B for the Property and make the relevant invoice changes. It asked if this satisfied Mrs X’s complaint and if so it would action this.
45. Mrs X said she was not willing to close her complaint given the way she had been treated and the resulting stress. She expected the Council to spend time checking what matters it had not addressed rather than herself. She queried why she had to drop her complaint to get the business rates account with Company B rectified.
46. The Council said it had discussed her complaints and offered resolution. It would not now look over previous correspondence to see what else it could do if she was not prepared to say what action she wanted. She could go to the Ombudsman.
47. In response to enquiries the Council provided a screenshot of its systems dated September 2021 that show it currently recorded Company B as the ratepayer at the Property from February 2019 to December 2020 and relevant credits remained on its account. It said it had no record of contact with Mrs X in August 2019.
48. The Council also explained the Grant funding schemes raised many issues regarding inaccurate records. It was resource intensive to address these issues which ultimately had a knock-on effect with regards to the time taken to resolve.

Findings

49. On 11 March 2020 the Council recorded Company B as the ratepayer at the Property and it received SBRR. The Council should therefore have paid Company B the Small Business Grant unless it had reason to believe it records were inaccurate. In that case it could withhold the grant and take steps to identify the correct ratepayer.
50. I recognise the Council may have needed to make various checks before paying a grant to Company B and that it faced an increased demand on its services, however this does not justify a six month delay in telling Mrs X its decision to refuse a grant. This is fault.
51. The Council initially refused a grant to Company B as it held information dated in July 2019 that a third party occupied the Property. I find fault in how the Council reached this decision because:
• The information was almost 12 months out of date; this was not reliable evidence of the occupier on 11 March 2020 and;
• The Council did not give Mrs X any opportunity to challenge its decision or provide any evidence to the contrary.
52. When Mrs X disputed the Council’s decision, the Council ignored the points she raised and simply maintained its original decision. This was further fault. Only in January/February 2021 did the Council consider Mrs X’s evidence of Company B’s occupation and then correct its records.
53. I find fault in the Council’s complaint handling because:
• It failed to address the complaint properly in the first instance; again referring to its July 2019 records and ignoring Mrs X’s assertions;
• It did not explain why it had continued to bill Company B if it had information in July 2019 that this was incorrect;
• It offered no further explanation for its delay in deciding Mrs X’s grant request;
• It did not explain what happened to the credit on Company B’s business rates account once it named a third party as the ratepayer;
• It did not offer a fair or appropriate remedy to the complaint.
54. Mrs X missed out on the Small Business Grant because of the Council’s fault and she was put to significant time and trouble corresponding with the Council and seeking to resolve matters. I will recommend the Council remedies this.
55. I acknowledge the Council delayed providing its initial response to the complaint, however I do not consider this was such a delay to amount to fault. I also acknowledge there was some confusion about who would respond to the complaint and at what stage. The Council explained why a Director rather than the Chief Executive would respond and explained why it would issue this response at stage 1. I consider the Council was entitled to take this view. And, the officer complained of did not deal with the complaint at stage 1. I therefore find no fault here.

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Agreed action

56. To remedy the injustice set out above the Council should carry out the following actions:
57. Within one month:
• Provide Mrs X with a written apology;
• Pay Mrs X £150 for time and trouble;
• Pay Mrs X £150 for distress;
• Pay Company B £10,000 for the missed grant.
58. Within three months:
• Remind staff of the need to offer service users a right of review to its decisions and;
• Provide relevant staff with training on effective complaint handling.
59. The Council has accepted my recommendations.

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Final decision

60. I find fault in how the Council decided on Mrs X’s grant request and how it handled her complaint. The Council has accepted my recommendations and I have completed my investigation.

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Parts of the complaint that I did not investigate

61. I did not investigate Mrs X’s complaints concerning Company E as part of this case. This is because I considered complaints raised on behalf of Company E under a separate investigation.
62. I did not investigate Mrs X’s complaints that the Council breached data privacy law. This is because the Information Commissioner’s Officer is the appropriate body to consider such matters.

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Investigator's decision on behalf of the Ombudsman