Summary: Ms Z, on behalf of Mr X, complained the Council wrongly refused his application for a Small Business Grant. The Council accepts it knew Mr X had been occupying the premises since 2016 and trying to register for business rates. The Council has offered to now pay Mr X £10,000 to resolve his complaint.

The complaint

1. Ms Z, on behalf of Mr X, complained the Council wrongly refused his application for a Small Business Grant as it was due to its delay that his business was not registered for business rates. Mr X also complains the Council failed to provide details of its Discretionary Grant Scheme in time for him to apply.
2. Mr X says the failure to pay the grant has caused financial difficulties.

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’s representative;
• made enquiries of the Council and considered the comments and documents the Council provided;
• discussed the issues with the complainant’s representative;
• 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

Small Business Grant Fund

7. In March 2020, in response to the COVID-19 pandemic, the government created schemes for councils to pay grants to small businesses. These included the Small Business Grant Fund (SBGF).
8. To receive funding from the SBGF a business had to be in receipt of small business rate relief (SBRR) or rural rates relief. Eligible businesses would receive a grant of £10,000.
9. Government guidance on eligibility for the SBGF scheme said:

• “Any changes to the rating list (rateable value or to the hereditament) after 11 March 2020 including changes which have been backdated to this date should be ignored for the purposes of eligibility.
• Local authorities are not required to adjust, pay or recover grants where the rating list is subsequently amended retrospectively to 11 March 2020.
• In cases where it was factually clear to the Local Authority on 11 March 2020 that the rating list was inaccurate on that date, Local Authorities may withhold the grant and/or award the grant based on their view of who would have been entitled to the grant had the list been accurate.

Key facts

10. Mr X runs a hairdressing business. He moved into his current premises in August 2016 and contacted both the Council and Valuation Office Agency (VOA) regarding the business rates. Mr X says he continued to correspond with both the Council and the VOA regarding his business rates but was unable to resolve the issues.
11. In April 2020, Mr X applied for the SBGF as his business was forced to close due to the lockdown. The Council refused to pay the SBGF saying Mr X’s business was not registered to pay business rates and was not in receipt of SBRR on 11 March 2020.
12. Mr X explained to the Council that he had been in his premises since 2016 and had been trying to register for business rates since that time. Mr X provided evidence of his contact with both the Council and the Valuation Office Authority (VOA) trying to register for business rates.
13. The Council refused to change its position. Mr X made a formal complaint to the Council about the situation. Its final response dated 1 March 2021 said while it had sympathy with the difficulties Mr X was facing, the decision to decline the SBGF had been made in accordance with government guidance. It said eligibility was dependent on being registered for business rates on 11 March 2020 and the scheme closed completely on 30 September 2020 and no further payments could be made.
14. The Council noted Mr X’s argument that the fact he was not registered for business rates was the Council’s fault but it said this was incorrect. The Council said the responsibility for valuing the premises and entering it on the rating list lies with the VOA. It took the view Mr X had sufficient time from occupying the premises in 2016 to ensure his property was correctly valued. It said the decision to decline the SBGF was the settled view of the Council.

Analysis

15. Mr X complains he was wrongly refused the SBGF as he had attempted to register for business rates since he occupied his current premises in 2016. Mr X has provided evidence of his contact with the Council and the VOA showing this. Mr X had also provided this evidence to the Council in his attempts to get COVID-19 grant funding from the Council.
16. In response to my enquiries on this complaint, the Council said it had reviewed Mr X’s case and the evidence he previously provided. It says it is clear Mr X had made the Council aware he was occupying his premises from 2016 onwards and also that it was aware the property was not on the valuation list compiled by the VOA. The Council has now decided to pay £10,000 to Mr X which is the amount of the SBGF. I am satisfied this action provides a suitable outcome for this part of Mr X’s complaint.
17. Mr X also complained the Council failed to provide him with details of its discretionary grant scheme after refusing his application for the SBGF. I have decided there is no merit in pursuing this part of the complaint further due to the action by the Council to pay Mr X £10,000.
18. The Council accepts there was fault in this case when it wrongly decided Mr X was not eligible for the SBGF. I welcome the Council’s acceptance of this and also of its offer of a remedy for the injustice caused.

Back to top

Agreed action

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

• Provide a written apology to Mr X;
• Pay Mr X £10,000 which is an amount equivalent to the SBGF; and
• Pay Mr X £200 to recognise any frustration suffered.

Back to top

Final decision

20. 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.

Back to top

Investigator's decision on behalf of the Ombudsman