Summary: The Council was not at fault for refusing to pay Mr X a COVID-19 business grant during the second national lockdown.

The complaint

1. Mr X complained the Council wrongly refused COVID-19 business grants applied for from November 2020 onwards.
2. Mr X said the refusal added to the financial difficulties caused by the COVID-19 pandemic, which led to the business closing.

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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. 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)
5. 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”.
6. 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

7. I considered:
• the information provided by Mr X and the Council; and
• relevant law and guidance, as set out below.
8. Mr X and the Council had an opportunity to comment on my draft decision and I considered their comments before making a final decision.

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What I found

Relevant law and Guidance

Local Restrictions Support Grant (Closed) Addendum (LRSG)

9. The Government provided support to businesses forced to close during the second national lockdown from 5 November to 2 December 2020.
10. Eligible businesses were those ordered to close by Government. The Health Protection (Coronavirus, Restrictions) (England) (No. 4) Regulations 2020 sets out which businesses had to close by law from 5 November 2020. This included non essential retail, entertainment venues, personal care venues and hospitality businesses (except for takeaway and delivery services).

Additional Restrictions Grant – Severe Impact (ARGSI)

11. The Government also provided discretionary funding for councils to support businesses that were required to close or had been severely impacted by the second national lockdown.
12. The Guidance, issued on 4 November 2020, said councils could decide how much funding to provide to businesses and exactly which businesses to target. It said this “could include – for example – businesses which supply the retail, hospitality, and leisure sectors, or businesses in the events sector”. Councils could use the funding to support businesses that were important to its local economy.
13. The Guidance also said:

“In taking decisions on the appropriate level of grant, [councils] may want to take into account the level of fixed costs faced by a business in question, the number of employees, whether they are unable to trade online and the consequent scale of coronavirus losses”.

14. This Council’s discretionary scheme was decided in line with Government Guidance. To be eligible, the business must:
• Be trading in Kirklees;
• Have been open and trading as usual before the restrictions;
• Have been legally required to close or have been significantly impacted by local restrictions from 5 November 2020. Businesses not forced to close will be required to provide evidence demonstrating a significant drop in turnover/sales as a result of stricter social distancing being implemented;
• Be operating in one of more of the following sectors:
1. independent non-essential retail;
2. leisure;
3. hospitality;
4. visitor accommodation;
5. personal care and close contact services;
6. retail, hospitality, leisure supply chain;
7. entertainment and tourism (including events and supply chain businesses); and
8. community facilities/centres, including faith-based venues.

What happened

15. Mr X runs an accident claims business. He applied for a Local Restrictions Support Grant (LRSG) in late November 2020. In December 2020, the Council refused a grant because it said his business was not required to close under Government restrictions for the second national lockdown. It provided a link to information about COVID-19 grant schemes on the Gov.uk website.
16. Mr X challenged the decision in January 2021. He said he understood his business was not required to close but said it was affected by a reduction in traffic on the roads during the lockdown. He also said other councils had paid grants to similar businesses.
17. A week later, Mr X sent a further email. He said he had not had a response to his query about the LRSG decision. He also asked if he was eligible for other grants, such as the scheme for businesses remaining open but severely impacted by the COVID-19 pandemic.
18. The Council responded in late February. It said his business was not in a sector required to close so he was not eligible for the LRSG scheme. It would, however, consider an application for a discretionary grant, based on the information he had already provided.
19. The Council decided the business was not eligible for a discretionary grant because it was not in one of the sectors it was prioritising (see paragraph 14 above).
20. Mr X asked what sector the Council put his business in. He considered it was “non essential retail”. He said he had closed in line with Government instructions because the business relied on walk-in trade. He also made a formal complaint.
21. The Council responded to the complaint in April 2020. It said it had reviewed his grant application but the original decision was upheld because the application did not meet the Government criteria for the LRSG scheme as explained in its email in February 2021.

My findings

22. It is not my role to say whether the Council’s decisions were correct. If there was no fault in the decision-making process, I cannot comment on the decisions reached.
23. Businesses were only eligible for a LRSG if the Government required them to close. Mr X’s business was not on the list of businesses required to close by law. Therefore, the Council refused the grant and there was no fault in the way it decided this. Mr X accepted his business was not forced to close, although it was significantly affected by the restrictions because reduced traffic on the roads meant fewer accidents.
24. The Council considered whether the business was eligible for a discretionary grant because it was severely affected by the COVID-19 pandemic. However, the business was not one of those the scheme prioritised. The Council therefore refused a discretionary grant, in line with its scheme, and was not at fault.
25. Mr X said other councils had supported similar businesses. The Government gave councils discretion to prioritise businesses important to the local economy when designing their discretionary schemes. The fact that other councils may have prioritised different businesses is not evidence of fault. Councils did not have discretion to pay the LRSG to businesses that were not required to close.

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Final decision

26. I have completed my investigation. I have not found evidence of fault.

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Investigator's decision on behalf of the Ombudsman