East Riding of Yorkshire Council (21 002 216)
The Ombudsman's final decision:
Summary: There was no fault in how the Council decided a business was not eligible for its COVID-19 additional restrictions grant scheme. We have therefore completed our investigation.
The complaint
- I will refer to the complainant as Mr F.
- Mr F complains the Council has refused his business’s application for a COVID-19 additional restrictions grant (ARG).
The Ombudsman’s role and powers
- 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)
- 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)
- 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”.
How I considered this complaint
- I reviewed Mr F’s correspondence with the Council, the Council’s ARG scheme policy, a chronology provided by the Council, and further background information provided by Mr F.
- I also shared a draft copy of this decision with each party for their comments.
What I found
- There has been a significant volume of correspondence between Mr F and the Council relating to this complaint. For the sake of simplicity I will not detail it all here, but instead will provide a summary of the key events.
- Mr F owns a business and lives in the Council’s area. According to the business’s website, it provides ‘asset finance’ for other people and businesses in a range of sectors, such as agriculture.
- In December 2020, he applied to the Council for an ARG for the business. In response, the Council asked Mr F to provide evidence of the business’s property costs.
- Mr F subsequently provided a copy of a tenancy agreement, naming himself as landlord, and his business as tenant.
- In January 2021, the Council asked Mr F for evidence of the business making rent payments. Mr F provided a copy of his bank statement in response. Following an email exchange with the Council, Mr F withdrew his application on 13 January.
- Mr F made two further applications for an ARG for his business in January and February.
- In March, the Council emailed Mr F to confirm it would not pay an ARG for his business. This was because businesses providing ‘financial services’ were excluded from its ARG scheme, and it considered this was what Mr F’s business was.
- Mr F appealed the Council’s decision in March. After further correspondence between them in April and May, the Council confirmed its decision Mr F’s business fell into the 'financial services’ category on 18 May. Mr F then made a complaint to the Ombudsman.
Legislative background
Council’s ARG scheme
- The Council’s scheme says:
“On 31 October 2020, the Government announced further funding for businesses in the form of the Additional Restrictions Grant. This grant enables local authorities to provide financial support to businesses that have had their trade severely affected by national and local restrictions put in place in order to control the spread of COVID-19. The amount available for each local authority to spend is fixed and can be used to provide support in financial years 2020-21 and 2021-22. It is for each local authority to determine how best to target this limited one-off funding.
“Due to the limited nature of the funding available, East Riding of Yorkshire Council will implement the Additional Restrictions Grant as a discretionary scheme, across multiple time periods to match periods of national or local restrictions. This will continue until the funding has been fully utilised.
“The funding available is not sufficient to provide support to all businesses. The scheme will target and prioritise support for those business which do not qualify for the mandatory national business grants during the various periods of national and local restrictions imposed by the Government.”
- The scheme also lists a number of businesses excluded from the scheme. This includes “Financial Services businesses”.
Analysis
- The Ombudsman’s role is to review how councils have made decisions. If a council has followed an appropriate process, considered all relevant information, and given clear and logical reasons for its decision, we generally cannot criticise it. We do not make operational or policy decisions on councils’ behalf, nor offer a right of appeal against their decisions; and we cannot uphold a complaint simply because a person disagrees with a council has done.
- Mr F made a total of three ARG applications for his business. From what I have seen, the first two applications were refused on the respective grounds that the business was home-based, and that the business’s premises was located in a different Council area.
- However, the Council’s final position on Mr F’s application was that it was ineligible because it was a financial services business. This is also the point Mr F raised in his complaint to the Ombudsman. I will therefore focus my consideration on this issue.
- As I have said, the business’s website explains it is a provider of ‘asset finance’ for a range of other sectors, facilitating credit agreements for businesses to purchase equipment and other assets. I note, also, Mr F’s ARG application forms describe the business as ‘asset finance’, although in a slightly different context on each form.
- Mr F disputes this puts the business in the ‘financial services’ category. He has provided a screenshot which he says is from the Council’s own website, which describes financial services as:
“[businesses] such as banks, building societies, cash points, bureaux de change, payday lenders”
- Mr F has also provided a copy of a letter from HMRC, which he says supports his argument the business does not constitute a financial service of this type (although having reviewed the letter, I cannot see any point where it appears to say this).
- Either way, I do not consider this gives me cause to question the Council’s decision. There is no formal definition of ‘financial services’ in the ARG scheme, and it is not clear to me where on the Council’s website the screenshot Mr F provided came from. Even if I accept this list, though, it is clearly not intended to be exhaustive, but rather a list of typical examples. The fact Mr F’s business does not fit exactly into any of the listed categories does not mean the Council cannot reasonably regard it as a financial service.
- Ultimately, the ARG scheme is for the Council to administer at its discretion. As I have explained, it is not for me to make my own decision about Mr F’s business’s eligibility, but simply to ensure the Council has properly applied its own scheme and given clear and cogent reasons for its decision. I am satisfied it has done so here.
- Mr F has also commented that Companies House’s description of his business shows it is not a financial service.
- The Companies House website describes Mr F’s business as “buying and selling of own real estate”. This seems inconsistent with the description of the business on its website, as well as Mr F’s description of the business on his application forms.
- Even accepting this, however, I still do not consider it affects the validity of the Council’s decision. It was not obliged to make its decision based on the information published by Companies House, especially where (as here) that information appears to be at odds with other information the Council held.
- I note Mr F says other councils have given grants to similar businesses, although he has named neither the councils nor businesses in question. However, the Council is entitled to make its own decision on the applications it receives under its own scheme. Decisions made other authorities do not set precedent here, and the Council is not required to follow their example in its own decision-making.
Final decision
- I have completed my investigation with a finding of no fault.
Investigator's decision on behalf of the Ombudsman