Summary: Mr B complained the Council refused him a discretionary grant under a scheme designed to support businesses impacted by COVID-19. We do not uphold the complaint, finding the Council was not at fault for rejecting Mr B’s application.

The complaint

1. I have called the complainant ‘Mr B’. He complains in April 2021, the Council refused him a discretionary grant to support businesses and the self-employed impacted by COVID-19.
2. Mr B says this has denied him a valuable source of support after financially struggling for over 12 months because of the impact of the pandemic.

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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. Before issuing this decision statement I considered:

• Mr B’s written complaint to the Ombudsman and any supporting information provided including that obtained in a telephone conversation with him;
• information provided by the Council;
• relevant law and guidance as referred to in the text below.

7. I also gave Mr B and the Council a draft version of this decision statement to comment on. I took account of any comments or new evidence provided in response, before reaching my final decision.

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What I found

Additional Restrictions Grant Fund

8. On 31 October 2020 the government announced that because of the continuing COVID-19 pandemic, it would reintroduce national restrictions. It gave money to councils to support businesses impacted as a result and created various schemes including the Additional Restrictions Grant (ARG) Fund.
9. The ARG funding was a discretionary scheme that aimed to support businesses severely impacted by coronavirus restrictions. The Government gave local councils discretion over how to distribute this funding. This was subject only to some restrictions on which businesses would not be eligible for funding (a consideration not relevant to this complaint).

The Council’s Scheme

10. The Council first introduced a scheme for distributing ARG funds in December 2020. Of relevance to this complaint is a revised version of that scheme which covered a second round of applications and came into force from March 2021.
11. The Council allowed any self-employed person or business based in its area to apply. It said to qualify for an award the applicant had to show “evidence of a substantial fall in revenues of over 40% as a result of the additional restrictions in place for Tier 3, Tier 4, or national restrictions compared to before 17 October 2020 when Elmbridge moved into Tier 2”.
12. The policy said: “businesses who provide all the required and valid evidence at the same time as submitting the application will be assessed for grant eligibility”. Those businesses which did not provide this information would be “contacted by email for the missing documentation”. If the Council received the correct evidence within two working days of a request, then it would “assess for grant eligibility in the date order we receive the missing documentation”.
13. The Council said it would consider “invalid” any partially completed applications or applications which did not “clearly” provide the information required.

Mr B’s application

14. Mr B is self-employed and works as a sole trader. In March 2021 he applied on time for the second round of ARG funding.
15. The application form asked Mr B to “describe in detail how your business has suffered a loss of at least 40% in revenue due to additional restrictions in place from 19 or 20 December 2020”. Mr B commented briefly saying only he had “no work” because of changes in the behaviour of his customers caused by restrictions imposed during national and local lockdowns.
16. The form next asked Mr B to answer: “before the 17 October 2020 how was your business earning more revenue?”. In his reply, Mr B said only his business was “dead because of lockdown”.
17. The form asked Mr B to provide supporting information including:

• bank statements showing revenue before 17 October 2020 to cover any six month period from December 2019;
• bank statements and/or sales orders from 19 December 2020 showing a 40% loss in revenue;
• the business’ latest audited accounts or a tax return showing annual turnover;
• a document in support of the bank accounts; it said this should explain “the key monthly income transactions to include and incoming transactions to exclude for calculating a 40% loss in income”.

18. Mr B attached some documents in response to these requests. But these comprised only a partial bank statement from 2020 and a summary from his 2019/20 tax return.
19. In mid-March 2021 the Council asked Mr B to provide more information, giving him two working days to reply. It asked him to provide:

• bank statements showing revenue before 17 October 2020 to cover any six month period from December 2019;
• bank statements specifically for January 2020 and January 2021;
• a copy of his “unabridged accounts” or a full tax return showing his annual turnover.

20. In reply Mr B sent more extracts from his most recent tax return and bank statements from January 2020 and January 2021. He sent this information within two working days as requested.
21. When the Council looked at these bank statements it noted Mr B had more revenue going into his account in January 2021 than in January 2020. On 1 April 2021 it wrote to Mr B saying his application for a grant was “invalid”. Because “based on the evidence provided in your application, we have assessed the figures provided and have been unable to calculate a 40% impact in revenue as a result of the 19 December 2020 restrictions”.

Mr B’s complaint

22. Mr B complained about this decision. He said the Council did not take account that in January 2021 the main source of revenue going into his bank account were transfers from his wife enabling him to pay bills. These were either transfers direct from her bank account or cash deposits after she withdrew cash from her account. Mr B pointed out his bank account had around the same balance at the start and end of the month and was overdrawn.
23. In his communications with the Council Mr B also provided a letter signed by his wife confirming the above. And he provided a letter from the company he contracts with, which explained how demand for services had decreased significantly since the start of the pandemic.
24. In its response the Council revisited the figures used to assess Mr B’s revenue in January 2020 and January 2021. It found that even after it excluded those bank transfers into Mr B’s account from his wife’s account, there was more money entering Mr B’s account in January 2021 than January 2020. The Council did not consider therefore that its decision to refuse Mr B a grant was wrong.

My findings

25. I have no doubt the lockdowns introduced because of the pandemic have negatively impacted Mr B’s business. Without going into detail about what it entails, I am satisfied there is enough information in the public domain showing the sector he works suffered a downturn because of changes in public behaviour caused by lockdown restrictions. I understand therefore why Mr B turned to the ARG funding scheme for support. And why, when he did so, he described his business in general terms as being ‘dead’ or severely impacted by all the various restrictions imposed since March 2020.
26. But the Council was clear in its policy on paying these grants that it would not rely only on the word of applicants when making payments from the scheme. It set a simple objective criterion for which businesses would qualify which relied on applicants showing they had lost 40% of their revenues from pre-17 October 2020. The policy and application form made clear it needed supporting evidence.
27. I find some confusion in how the Council applied the policy in practice. As noted, the policy referred to ARG funding relying on the applicant showing a 40% drop in revenues from 17 October 2020 and part of the application form referred to this also. But another part of the application form and the decision on Mr B’s application referred instead to qualification relying on the applicant showing a 40% drop in revenues from before 19 December 2020. And when it came to the assessment of Mr B’s application the Council seems to have considered any fall in revenues from before March 2020. As it compared his bank statements from January 2020 and January 2021.
28. However, I have decided I do not need to try and resolve these seeming different approaches. This is because I find no record Mr B gave the Council evidence that would show he suffered a 40% loss of revenues whether measured from pre-17 October 2020 or 19 December 2020. I also agree with the Council that Mr B’s evidence did not evidence a loss of revenue when it compared his January 2020 and January 2021 bank statements.
29. I noted two key pieces of evidence missing which I consider the Council needed to pay Mr B from its scheme. First, the six months’ worth of financial information that would show revenue from Mr B’s self-employment for any time between December 2019 and 17 October 2020. I note the Council asked Mr B for this twice on both the application and in its enquiries of mid-March 2021. I find no evidence he provided it.
30. Second, any statement from Mr B which would explain how his revenues fell because of the pandemic or would aid the Council when it came to understanding his bank statements. I find no evidence Mr B provided such a statement with his application in March 2021 despite the Council asking for this.
31. I note the Council did not ask Mr B to provide such a statement when it made enquiries in mid-March 2021. Had the statement been the only information missing which might have led to Mr B receiving payment then I would consider why the Council did not ask for it again. But I see no reason to pursue enquiries given as I have explained it was not the only information missing which would enable the Council to make a payment.
32. Third, I note Mr B went on to provide some explanation for the transactions on the bank accounts he provided when he made his complaint. But I find that even if Mr B had provided explanation sooner it would still not have enabled the Council to pay him from the ARG scheme. Mr B explained money entering his account in January 2021 came mainly from his wife. Some of this was clear from the bank transfers. But there was no audit trail to show her account was the source of the cash deposits. So, the Council remained of the view that Mr B had not demonstrated a fall in revenues, and I cannot find fault in that.
33. Where a council has followed the correct process, considered all relevant information and given clear reasons for its decision, we cannot criticise it. We do not make decisions on a council’s behalf or provide a route of appeal against their decisions. I recognise Mr B does not agree with the decision made in his case, or how the Council reviewed his decision after he complained. But for the reasons explained above, I cannot find fault in the process followed by the Council. Therefore I cannot uphold his complaint.

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Final decision

34. I do not uphold this complaint as I find the Council was not at fault in respect of the matters complained about. Consequently, I have completed my investigation satisfied with its actions.

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Investigator's decision on behalf of the Ombudsman