Summary: Mr X complained the Council wrongly refused COVID-19 business grants. There was no fault in the way the Council considered Mr X’s grant applications.

The complaint

1. Mr X complained the Council wrongly refused a Local Restrictions Support Grant and Restart grant. He said the Council did not consider the information he provided about the nature of the business, including a letter from his accountant. He said he was unhappy with the way the Council treated him, which made him very upset.

Back to top

The Ombudsman’s role and powers

2. 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)
3. 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”.
4. 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

5. I considered the information provided by Mr X and the Council, and relevant Government Guidance, as set out below.
6. Mr X and the Council had an opportunity to comment on my draft decision and I considered their comments before making a final decision.

Back to top

What I found

Government Guidance

Local Restrictions Support Grant (Closed) Addendum (LRSG)

7. The Government provided support to businesses forced to close during the second national lockdown from 5 November to 2 December 2020. This was later extended to cover the third national lockdown from 5 January to 31 March 2021.
8. Eligible businesses were those required to close in line with Government restrictions. The Health Protection (Coronavirus, Restrictions) (England) (No. 4) Regulations 2020 sets out which businesses had to close by law. This included non-essential retail, leisure, personal care, sports facilities and hospitality businesses.

Restart grant

9. Support was provided to support specific types of business, including non essential retail businesses, to enable them to reopen safely after restrictions were lifted following the third national lockdown. To be eligible, the business must:
• be the liable ratepayer on 1 April 2021;
• be engaged in offering in-person services in the relevant sectors; and
• trading (engaged in business activity) on 1 April 2021.
10. The Guidance set out the types of businesses that could be considered non-essential retail and specifically excluded some business types including food retailers of various types. Those lists were not exhaustive and the Guidance said it was for councils to determine those cases where eligibility was unclear.

What happened

11. Mr X operates a business, which sells and distributes drinks. The business premises are used for sales meetings with potential distributors and customers interested in buying the drinks for retail sale.
12. Mr X applied for a Local Restrictions Support Grant (LRSG) on 4 December 2020. On the application form he described the business as retail, distribution and manufacture of drinks, and said it had been forced to close as a result of national restrictions on 5 November.
13. The Council refused the grant on 8 December 2020 because manufacturing and distribution businesses were allowed to continue during the lockdown. It explained that only businesses required to close due to national restrictions were eligible for the grant, and provided a link to further information on the Gov.UK website.
14. Mr X was unhappy with the decision and sent an appeal on 29 December 2020. He said the business met the criteria because it needed to meet customers face to face. He attached a letter from his accountants, which confirmed the business activity was retail and distribution of drinks. The accountants explained the business premises were used for meeting potential distributors and customers, who needed to try the drinks and negotiate terms of sale and returns.
15. Mr X sent an email asking for an update on 16 January 2021. The Council responded on 19 January 2021. It asked for evidence of face to face sales for the period 5 August to 5 November 2020. It said on receipt of that it would reconsider the grant application. Mr X did not provide the evidence requested.
16. On 26 February 2021, the Council’s reconsideration team confirmed that, as the business was not required to close, the original decision would stand. However, if the business was significantly impacted by the national restrictions, Mr X could apply for a discretionary grant. It said it could consider this, based on the information already provided.
17. Mr X remained unhappy and complained on 31 March 2021. He said the Council:
• had initially refused the grant without asking how the business operated;
• had then ignored the information he provided, including the letter from his accountant;
• had not applied the Government criteria correctly; and
• was wrong to refer him to its discretionary scheme.
18. The Council said it had reconsidered the application and confirmed the decision, and it had nothing further to add. There were further communications in which Mr X asked the Council to confirm this was its final decision, which it did, following which he complained to us.
19. The Council also considered whether the business was eligible for a discretionary grant. The decision making record indicates it asked Mr X for additional information and sent a chaser email with a deadline but Mr X did not respond. It also shows the business was not in one of the eligible sectors for this Council’s scheme and had not provided evidence of a significant impact as a result of COVID-19 restrictions. The Council wrote to Mr X on 13 May 2021 refusing a discretionary grant. It said its reason was that Mr X “did not respond to requests for further information needed to progress [the] application”.

My findings

LRSG

20. Mr X applied for a LRSG during the second national lockdown. Government Guidance said eligible businesses were those forced to close by law. The Council had no discretion about this.
21. Mr X’s business was not one that was on the list of businesses forced to close. The business premises were listed on the VOA ratings list as “office and premises”. Offices were not required to close, nor were food businesses. The Council did give Mr X the opportunity to provide further information to show face to face sales but he did not provide this.
22. Based on the information it had, the Council decided the business was not required to close and therefore not eligible for the LRSG. There was no fault in the way it considered this.
23. It would have been good practice to specifically address the evidence provided, including the accountant’s letter, when responding to the appeal but I am satisfied the Council explained its decision so this does not warrant a finding of fault.
24. I also consider the Council should have signposted Mr X to us at that point and have not seen evidence it did so. However, it is clear from the communications around that time that Mr X was aware he could refer to us of he remained unhappy and later did so. Therefore, this does not justify a finding of fault.

Restart grant

25. The Council refused the Restart grant on the basis the business was not forced to close and did not, therefore, need help with reopening.
26. There are circumstances in which a business not forced to close could be eligible for a Restart grant. However, food businesses and offices are both specifically excluded from that scheme.
27. The Council was, therefore, not at fault for refusing the Restart grant.

Discretionary scheme

28. The Council considered whether the business was eligible for a discretionary grant. I have not seen the emails it sent to Mr X asking for further information but have no reason to doubt it sent them. Its record indicates Mr X did not respond and the Council refused the grant on that basis. The record also indicates the business was not in one of the eligible sectors for a grant so the Council could have declined the grant for that reason. Although Mr X may be unhappy about the refusal, the decision was in line with the Council’s published scheme.
29. It was not fault for the business rates team to suggest an application to the discretionary scheme. That scheme was administered by a different team, and I would not expect the business rates team to be aware of the detailed criteria. Having refused the LRSG, it was appropriate for the Council to consider if there were other sources of support that might be available.

Back to top

Final decision

30. I have completed my investigation. I have not found fault.

Back to top

Investigator's decision on behalf of the Ombudsman