Summary: Miss X complained about the refusal of the Additional Restrictions Grant and the failure to respond to a complaint about a racist comment. There is no fault in the decision to refuse the grant but there is in relation to the consideration of the complaint about a racist comment. A suitable remedy for the injustice caused is proposed.

The complaint

1. Miss X complains the Council wrongly refused her application for the Additional Restrictions Grant (ARG). She also complains an officer made a racist comment and the Council failed to address this when she complained.
2. Miss X says the refusal of the grant has had a significant financial impact on her business and she suffered distress and frustration due to the Council’s failure to properly respond to her complaint.

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The Ombudsman’s role and powers

3. We investigate complaints of injustice caused by ‘maladministration’ and ‘service failure’. I have used the word ‘fault’ to refer to these. 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. 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)

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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.

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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.
8. The ARG funding is a discretionary scheme that aims to support businesses severely impacted by coronavirus restrictions. All businesses that are trading and meet other eligibility criteria may apply to receive funding under this scheme. Government guidance said applications are required under this scheme for new applicants.
9. This Council’s discretionary scheme was decided in line with Government Guidance. To be eligible, the business must:
• Not be eligible for the Local Restrictions Support Grant (closed) Scheme and can demonstrate it has been severely impacted by the restrictions put in place to control the spread of COvID-19;
• Have relatively high ongoing fixed building-related costs such as mortgage, lease or rent for a business premises; and
• Demonstrate they have been severely financially impacted by the restrictions and the scale of the losses.

Key facts

10. Miss X runs a food business. She signed an agreement to work within an existing pub running her business from one room. Miss X says the business has been in operation since July 2020.
11. In November 2020, Miss X completed an online application for the Additional Restrictions Grant. The Council wrote to Miss X requesting further information in support of the application because Miss X was not the ratepayer for the premises. The Council requested recent bank statements, a copy of the tenancy agreement and evidence of rent payments. Although Miss X sent the requested information, it went into the Council’s junk email folder. The officer therefore telephoned Miss X about the missing information.
12. Miss X says they had a conversation for about an hour. Miss X told the officer she had another business locally and the officer confirmed this was close to where she lived. The Council says Miss X had sent bank statements in the name of a different business, a handwritten licence agreement with illegible witness signatures and no witness names or addresses. The agreement stated a rent-free period from 3 September to 3 November was given to allow time to refit the premises.
13. At the beginning of December, Miss X says she spoke with the officer again and answered further questions about the rent-free period at the premises and the length of the renovations. Miss X says the officer told her she was happy with everything but would need to speak with her manager before processing the payment.
14. Miss X says she spoke with the officer again on 18 December and was told the payment had been agreed and that she should look out for an email. Miss X says she received an email on 23 December saying the payment could not be made and requesting further information.
15. The Council’s email to Miss X sets out its concerns about the information Miss X provided in support of her grant application. It says it is difficult to determine which of the transactions shown on the bank statements relate to the new pub business and which are personal or relate to another business. It said that to qualify for the grant, she must have been trading prior to 5 November and so asked for the trading accounts in relation to the food and drink service she was operating from the pub premises.
16. The Council also said the tenancy agreement provided showed a rent-free period from 3 September to 3 November while she carried out refurbishments. However the application form said the business started on 11 July. The Council asked Miss X to explain the discrepancy in the dates as it would not expect her to start trading until the refurbishments had been carried out.
17. The Council also asked about the signatures of the witnesses on the tenancy agreement. It said they were illegible and that it did not include a print of their name and full address which is normally required on a document of this type.
18. Miss X says the information requested had already been provided and so she did not reply to the email. Instead she left voicemail messages as the officer was not available.
19. The Council sent Miss X an email on 26 January. The Council said it had not received a response to its previous email requesting trading accounts. It went on to say that as a non-ratepayer, Miss X’s application had been considered under the ARG scheme. It said in the absence of trading accounts, it had relied on the other evidence provided. It said this was a handwritten tenancy agreement showing rent of £1,500 a month for the back bar and kitchen area of an existing pub business. It said the bank statement provided was in a different name and the account number did not match the account stated on Miss X’s application form. It said Miss X had not provided copies of bank statements for that account.
20. The Council also said that while the bank statement provided showed payments to the pub landlord, it also showed corresponding payments into the bank account on the same day. It also said it was not clear if the income into this bank account was derived from the pub business and not from another of Miss X’s businesses.
21. The Council said it was not satisfied that Miss X was operating a business that functioned separately to that of the pub itself and so it was unable to approve her application.
22. Miss X spoke to the officer on 27 January. She says she put the call on a loud speaker and some of her staff heard the phone conversation. Miss X says the officer agreed she previously indicated the payment would be made but the decision had changed. Miss X says the officer spoke over her when she asked about this changed decision. She says the officer said the Council did not consider her business was viable and that she could not understand how she could pay rent of £300 a week for a food business of this culture. Miss X says she was offended by the comment regarding the culture of her business and the suggestion that this made it unviable in that area. Miss X says the conversation deteriorated but that she agreed to send further documents including her business accounts. Miss X says that she broke down when the call ended because she was so upset by the comments made.
23. Miss X submitted her formal written complaint the same day. She asked the Council to look into the situation regarding her grant application. Miss X said that she did not understand the sudden change in attitude and felt that it was associated with racial hatred. She said she was upset to be treated with such disregard and disrespect and felt saddened by how her business and culture had been treated.
24. The Council responded to the complaint on 11 February. It said its understanding of Miss X’s complaint was that she was unhappy because she believed a discretionary business grant payment would be made and this decision was changed. The Council said it found no evidence Miss X was advised at any time that she would receive a grant. It said it had reviewed the information provided and treated it as an appeal. It said it was not persuaded Miss X was legally required to pay rent and that the landlord of the public house had confirmed this to be the case. It was not persuaded the business was trading on 4 November 2020 and so considered Miss X was not eligible for the ARG. The Council’s response made no reference to the complaint about racist comments.
25. On 28 January, Miss X asked why a complaint made about an officer and her manager was responded to by the manager complained about. She asked for the details of a more senior manager.
26. The Council replied on 25 February. It explained that under its complaints’ procedure, the first stage is considered by the service manager. The Council said it had reviewed documents and discussed the issue with officers and found nothing to show that the Council had indicated it would pay the grant. It also said that it considered the issues raised at stage one had been fully addressed. The Council said if Miss X remained unhappy she could make a further complaint at stage two of the complaints procedure. The stage 2 response also made no reference to the complaint about racist comments.
27. Miss X asked to make a stage three complaint. She said that neither of the previous stages had been responded to correctly. She said that a member of staff clearly told her the decision was related to her ethnicity. She asked a senior officer to review the emails and listen to telephone calls. She said that she had not received any help and her business and staff were suffering.
28. The Council provided a stage three complaint response on 26 March 2021. It explained it had reviewed documents but could not review the telephone calls as there were no recordings. The Council said it was satisfied that the concerns previously raised had been addressed either directly or through the complaints process at stages one and two. It said the reasons for the refusal of the grant application had been clearly stated and the decisions were considered to be correct.
29. The Council said it noted as part of the review that Miss X had questioned whether the ethnicity of her business was a factor in the decision to refuse the grant. It said it was satisfied this had not been a factor in any decision taken regarding her businesses and that such criteria did not exist within the Government’s or Council’s grant policies.
30. Dissatisfied with the Council’s response, Miss X complained to the Ombudsman.

Analysis

31. Miss X complains the Council wrongly refused her application for the ARG and that the Council failed to address her complaint about racist comments. I will deal with each issue in turn.
32. Miss X made an application in November 2020 for the ARG. The Council sought information from Miss X about the business. Miss X did provide some evidence of her business but the Council was not satisfied with this. The information provided shows the Council explained in an email on 23 December the concerns it had about the information provided and detailed the further information it required. There is nothing to show Miss X provided this further information.
33. In its email of 23 January refusing Miss X’s grant application, the Council provided an explanation of how it had considered the evidence provided by Miss X and why it did not consider she is eligible for the ARG. While I appreciate Miss X does not agree with the Council’s decision, I am not persuaded there is any fault in the process leading to that decision.
34. The Ombudsman’s role is to consider councils’ adherence to procedure in making decisions. Where a council has followed the correct process, considered all relevant information, and given clear reasons for its decision, we generally cannot criticise it. We do not make decisions on councils’ behalf, or provide a route of appeal against their decisions, and we cannot uphold a complaint simply because a person disagrees with a council’s decision.
35. Miss X also complains the Council failed to deal with her complaint that the officer’s decision was affected by racism due to her business being an ethnic food business. Miss X alleges that during a telephone call an officer said her business was not viable because it was an ethnic food business. I interviewed a member of Miss X’s staff who heard the telephone conversation. He confirmed a comment was made about the cultural nature of the business and felt it had racist overtones. As part of my enquiries, I asked the Council to provide the recollections of the officer who spoke to Miss X. The officer denies making any racist comments and that she did not make reference to the ethnicity of the food.
36. As there is no recording of this telephone call I cannot know for certain exactly what was said and the context in which any comments were made. However, I am satisfied Miss X was offended by the conversation and her actions in making a complaint the same day support this.
37. I have considered how the Council responded to Miss X’s allegation that racist comments were made. Her original complaint dated 27 January, while about the Council’s failure to pay the grant, also mentioned the racist comments. The first two responses from the Council did not make any reference at all to this issue. I consider this was fault.
38. When the Council did make reference to this part of Miss X’s complaint in its stage three response, it simply said it was satisfied ethnicity had not been a factor in any decision. There is no explanation of what information the Council considered to reach that view or any denial from the officer that the comments were made.
39. I consider the Council should have done more to investigate this part of the complaint. I note there was no recording of the call but also that no notes were made by the officer at the time of the call. The Council has taken a position and dismissed this part of Miss X’s complaint without providing any evidence or explanation of how it came to this view. This is fault.

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Agreed action

40. To remedy the injustice caused to Miss X as a result of the fault identified in this case the Council will, within one month of my final decision, take the following action:

• Apologise to Miss X for its failure to address her complaint fully in its first two responses;
• Pay Miss X £150 to recognise her time and trouble in pursuing this complaint ; and
• Remind relevant staff of the importance of responding to all aspects of a complaint.

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Final decision

41. I have completed my investigation with a finding of fault for the reasons explained in this statement. The Council has agreed to implement the actions I have recommended. These appropriately remedy any injustice caused by fault.

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Investigator's decision on behalf of the Ombudsman