Summary: Mr X complained the Council wrongly refused his business a grant, causing financial difficulties. We find no fault in the Council’s decision making.

The complaint

1. Mr X complains the Council wrongly refused his business at Address B a grant, causing financial difficulties.

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The Ombudsman’s role and powers

2. 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)
3. 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. I spoke to Mr X and I reviewed documents provided by Mr X and the Council.
7. I gave Mr X and the Council an opportunity to comment on my draft decision. I considered any comments before making a final decision.

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What I found

Rating list

8. The Valuation Office Agency (VOA) provides valuations and property advice to support taxation and benefits to the government and local authorities in England, Scotland and Wales. It compiles and maintains lists detailing the rateable value of 1.9 million commercial properties for business rates; the rating list.
9. A council will then record the ratepayer at each of these properties, for billing purposes.

Local Restrictions Support Grant (Closed)

10. The Government issued guidance to councils on how to administer a Local Restrictions Support Grant for the period 9 September to 5 November 2020.
11. Eligible businesses were those the Government ordered to close.
12. Grants were payable to the person the council recorded as the business ratepayer. However, where a council had reason to believe the information it held on the ratepayer was inaccurate, it could withhold or recover the grant and take steps to identify the correct ratepayer.

Local Restrictions Support Grant (Closed) Addendum

13. The Government issued an addendum to its guidance, for the period 5 November to 2 December 2020.
14. Eligible businesses were those the Government ordered to close and included non-essential retail, leisure, personal care, sports facilities and hospitality businesses.
15. Businesses must have been trading the day before national restrictions came into force to be eligible for funding.
16. Businesses on the rating list with a rateable value of exactly £15,000 or under on the date national restrictions began would receive a payment of £1,334 per 28-day qualifying restriction period.

Local Restrictions Support Grant (Closed) Addendum- Tier 4

17. The Government issued a further addendum to its guidance, applicable from 19 December 2020.
18. Eligible businesses were those the Government ordered to close and included non-essential retail, leisure, personal care, sports facilities and hospitality businesses.
19. Businesses must have been trading the day before national restrictions came into force to be eligible for funding.
20. A business is trading if it is engaged in business activity. This meant; carrying on a trade or profession, or buying and selling goods or buying and selling goods or services in order to generate turnover.
21. Indicators that a business is trading include:
• The business has staff on furlough
• The business continues to trade online, via click and collect services etc.
• The business is not in liquidation, dissolved, struck off or subject to a striking-off notice or under notice
• The business is engaged in business activity; managing accounts, preparing for reopening, planning and implementing COVID-safe measures
22. This list of indicators is not exhaustive and councils must use their discretion to decide if a business is trading.
23. Businesses on the rating list with a rateable value over £15,000 and less than £51,000 on the date national restrictions began will receive a payment of £1,000 per 14-day qualifying restriction period.

Business Support Package for January Lockdown

24. The Government issued further guidance applicable from 5 January 2021.
25. This guidance set out the conditions for two schemes:
• The Local Restrictions Support Grant (Closed) Addendum: 5 January onwards and
• The Closed Businesses Lockdown Payment.
26. Businesses must have been trading the day before national restrictions came into force to be eligible for funding.
27. A business is trading if it is engaged in business activity.
28. Where councils previously rejected applications from businesses that were not open, but could be considered to have been trading, they should revisit those applications and pay those businesses retrospectively.
29. If a business is ordered to close its main, in-person service but adapts its business to operate takeaway, click and collect or online with delivery services, it will be considered closed and be eligible to receive grants under this scheme because its substantive business must close.

Expanded Retail Discount

30. In April 2020 the Government published guidance for councils on how to apply the Expanded Retail Discount 2020/21.
31. This was available to occupied businesses that were mainly used for retail, hospitality or leisure.
32. Of relevance to this case, a retail business was one which provided goods or services to visiting members of the public.
33. Properties which closed temporarily due to the Government’s advice on COVID-19 were to be treated as occupied for the purposes of this relief.

What happened

Background

34. On 5 December 2020 Mr X applied for a Local Restrictions Support Grant (LRSG) for his business at Address A.
35. The Council told Mr X his business was not the recorded ratepayer. And the VOA rating list described the property as an office, which was not one of those businesses ordered to close. It therefore asked Mr X for evidence the business occupied the property and so should be recorded as ratepayer. It also asked for evidence it was trading as a hair salon and required to close.
36. Once the Council received information from Mr X it updated its record of the ratepayer and asked him to apply for the grant again. It also confirmed it had closed the rates account for the business at Address A effective from 23 December 2020; the date the lease expired.
37. Mr X applied for an LRSG for his business at Address A again on 23 March 2021. The Council paid £1334 for the lockdown restrictions that affected the business, from 5 November to 1 December 2020.

This complaint

38. On 14 December 2020 Mr X moved his business from Address A to Address B. I note Address B has a rateable value over £15,000.
39. Mr X says on 6 January 2021 his colleague informed the Council of their new address at Address B and asked which address to use for the Government grant application. Mr X says the Council said to complete one application for the old address and then another application for the new address. Mr X has provided a phone bill showing a call was made to the Council on this date. The Council has been unable to provide any record of any call.
40. Mr X says on 13 January his colleague asked for confirmation that the previous information provided by the Council was correct and more guidance on how to fill in the forms. Mr X has provided a phone bill showing a call was made to the Council on this date. The Council has been unable to provide any record of any call.
41. On 30 January Mr X emailed the Council regarding his application for a LRSG at Address A and noting the business had since moved. He did not give details of the new address.
42. The Council says it has no record of being told of the change in address until contact from Mr X by email of 15 March.
43. By email of 15 March the Council told Mr X it had updated his business as the ratepayer at Address A and closed the rates account on 23 December 2020.
44. In reply, on 15 March, Mr X expressed confusion as to why the Council closed the rates account as the business continued, but now from Address B. He asked the Council what he needed to do to get a grant at Address B. The business moved to Address B on 14 December but was unable to trade due to lockdown restrictions yet had not received any grant.
45. On 23 March Mr X complained to the Council. However, the Council asked Mr X to resend this as it could not access the file.
46. On 24 March the Council repeated to Mr X it had closed the account at Address A however Mr X could apply for a LRSG for the period 5 November to 1 December and 20 December to 4 January 2021.
47. On the same date, the Council acknowledged the lease provided for Address B and asked Mr X for evidence of occupation from 14 December and proof of when he commenced trading so it could update its records. It asked him to provide:
• A signed lease and evidence of rent paid
• Sales receipts from the new premises to show when they started trading
• An opening utility bill
• Public liabilty insurance
48. The Council also asked Mr X to apply for the Expanded Retail Discount (ERD).
49. On 25 March Mr X sent the Council:
• A signed lease for Address B
• Evidence of purchasing the lease
• Invoices to customers dated in January and February 2021
• Utility bills dated 15 December 2020 to February 2021
• Bank statements dated 31 December 2020 to 26 February 2021
• An application for the ERD.
50. In response the Council told Mr X he did not have public liabilty insurance and the invoices provided did not evidence sales from the premises itself. It had therefore set up an empty rates account from 14 December 2020 as he had not yet evidenced occupation. As such it could not apply any grants or the ERD.
51. Mr X explained his public liabilty insurance had expired and he did not renew this because clients did not visit the premises during lockdown. He did not understand why this was an issue now. They could not operate from the premises during lockdown but sold goods to customers online. They produced these goods in the premises at Address B. He did not understand why the Council had closed the rates account at Address A instead of just updating the business address on the account. He started operating from Address B on 14 December 2020, creating products on site and posting products to customers who paid by bank transfer.
52. The Council received Mr X’s complaint on 1 April. He enclosed his complaint of 30 March. In summary he said:
• He spoke to the Council on 16 December and explained he had moved to Address B on 14 December and wanted to apply for a grant. The Council said to apply giving Address A only.
• He applied for a grant at Address A and the Council asked for more information which he provided.
• The Council then told him it had closed his business rates account at Address A.
• He queried this and asked what he needed to do to get a grant noting they had since moved to Address B.
53. Mr X added on 1 April:
• They immediately told the Council once they moved to Address B but instead of registering the business at the new address it closed the business rates account (at Address A) and refused a grant.
• They had contacted the Council several times but each time had been directed away from the Council registering the new address.
• He explained why they did not have public liability insurance and questioned why this was being raised now given it was not an issue when they received a grant at Address A.
• He explained why they did not have evidence of payments made on the premises and said the Council could not rely on a payment terminal as the only proof that the business was operating from the premises.
• The premises at Address B were operating immediately, “receiving the customers” and taking payments via bank transfer from 14 December 2020. Then from the start of the lockdown (20 December 2020) they were operating from the new premises but without physically receiving the customers. They had a large base of customers ready to testify they received products by post from 14 December 2020.
54. On 14 April the Council responded to Mr X’s complaint. It said:
• It had no record of a call from him on 16 December 2020. It had corresponded with him regarding the account at Address A which had since been updated and a grant paid.
• It was unaware he had moved to Address B until his email of 15 March 2021 and it had not received any documents regarding the new address.
• It then asked for evidence of occupation from 14 December. He had provided some on 25 March. The utility bill showed very low amounts which did not evidence occupation. Invoices dated in January 2021 were during the period where his business would have had to close. It confirmed on 30 March it would treat the property as empty from 14 December. Where a property was empty and not trading it was not entitled to any grant or the ERD.
• To claim the grant and ERD Mr X needed to evidence he was trading from Address B from 14 to 19 December 2020, before the Tier 4 restrictions came into force. This could be receipts from customers who visited the salon during that period. It had also asked for bank statements from December 2020.
55. On 16 April Mr X sent the Council:
• Bank statements for the period 1 to 31 December 2020
• Six invoices
• Six receipts
56. In response the Council told Mr X only one invoice had a related credit posted to the bank account. It asked Mr X to send till or card receipts for the other invoices.
57. Mr X told the Council they limited their travel including depositing payments into their bank account. However, he deposited cash in the account once lockdown was lifted.
58. The Council told Mr X that evidence he banked cash recently did not prove the business was trading from Address B on 14 December. It had considered the utility bills of a low amount plus invoices with no corresponding till receipts. This was insufficient evidence to show he was in occupation of Address B from 14 December to 19 December and so it could not update its records.
59. On 21 April Mr X complained:
• On 14 December 2020 he moved his business to Address B and continued to trade from there. He told the Council he had moved but instead of updating the address on his account it closed his business rates account. Every time he had since tried to apply for a grant the Council came up with new reasons to refuse his request. The Council had treated it as a new business but its trading continued and it then had to close on 20 December 2020 due to the further lockdown.
• The business usually took card payments but while setting up the new business he asked customers to pay in cash. They then held onto any cash until the end of lockdown and so made no bank deposits.
• He explained his energy usage was minimal but this was not a reason to refuse the grant. Further the Council had misinterpreted his bill as being a lower amount than it was.
• He felt the Council should treat this as an existing business that had traded for six years instead of seeking evidence of trading from the new address.
60. The Council provided it stage 2 complaint response on 21 May. It explained:
• It had no record of any phone calls or emails where Mr X gave a new address for the business until 15 March 2021. In his email of that date he provided a copy of a lease but this was not signed.
• On 24 March it asked him for evidence of trading at Address B since 14 December so it could update its records. He provided further details of the lease and evidence of rent paid. A utility bill with low charges and invoices showing goods sold remotely in early 2021. In April he provided a bank statement for December 2020, invoices and receipts but only one invoice/receipt matched an entry on the bank statement. This was not sufficient evidence to prove trading from the premises and so it asked for further till receipts. While he provided further invoices and explained the delayed cash deposit this did not evidence trading from 14 December.
• Trading history at Address A did not evidence he was trading from Address B
• It had no evidence of a credit applied to his utility bill but even taking this into account the usage was too low to evidence occupation given the size of the property. Also usage was similar during the period the property had to close.
• As there was insufficient evidence he was trading from Address B prior to the Tier 4 restrictions coming into force on 20 December 2020 he was ineligible for the Tier 4 grant and the third lockdown grant that followed it on 5 January 2021. The grant schemes for the period up to 15 February 2021 were now closed. The grant scheme for the period 16 February 2021 to 31 March 2021 was currently open to applications until 31 May 2021.
61. Mr X then complained to the Ombudsman.
62. The Council told the Ombudsman Mr X was not eligible for the Tier 4 grant because there was insufficient evidence to show the business was trading before 20 December 2020. The Tier 4 grant applied from 20 December 2020 to 4 January 2021.
63. The ERD for 2020/21 applied only to ratepayers who were trading from their premises during the period 1 April 2020 – 31 March 2021. There was insufficient evidence of trading from the premises from 14 December to 19 December 2020. From 20 December to 31 March Mr X could not trade from the premises as the Tier 4 restrictions ordered the closure of such businesses from 20 December 2020 to 4 January 2021 and then the national lockdown restrictions ordered closure for these types of businesses from 5 January to 31 March 2021.
64. In response to enquiries the Council said: when a business rate account is created, it is linked to the property it was created for. Where a ratepayer moves to another property it must create a new rate account for that new property. It was not possible to use an account set up for one property for another property. Therefore, it had to close Mr X’s rate account for Address A and open a new account for Address B.

Findings

65. Address A and Address B have separate entries on the VOA rating list and so would hold separate business rates accounts with the Council. When Mr X moved his business from Address A, the Council was right to close his business rate account at Address A. It then had to set up a new rates account for the business at Address B. I find no fault in this regard.
66. Mr X had to evidence he was already trading from Address B on 19 December 2020 to get a grant. It was up to councils to decide whether a business was trading or not based on the information available. The Council asked Mr X for evidence, assessed this and decided this did not prove he traded from Address B at the relevant time. It gave Mr X clear reasons for its decision, explained in context and with reference to the evidence provided. The Council considered all relevant information and decided in line with law and policy. I therefore find no fault in its decision making.
67. Mr X had to evidence he occupied Address B and used it to provide goods or services to visiting members of the public to get the Expanded Retail Discount (ERD). Businesses that did not serve visiting members of the public were not eligible for the Discount. The Council asked Mr X to evidence he occupied and traded from Address B during the period 14 to 19 December 2020, (when the business could open and serve customers). The Council assessed the evidence and decided this did not prove Mr X occupied and traded from Address B at the relevant time. It gave Mr X clear reasons for its decision, explained in context and with reference to the evidence provided. The Council considered all relevant information and decided in line with relevant law and policy. I therefore find no fault in its decision making.
68. While I accept on balance Mr X and his colleague told the Council the business had moved to new premises prior to March 2021, there is a lack of evidence they also provided the new address for it to update its records. In any event, this did not affect the Council’s decision. Once it was aware of the new address it properly considered Mr X’s request for a grant and ERD.
69. When Mr X queried the Council’s closure of the business rate account at Address A the Council did not fully explain why it had done this. This was an error that contributed to Mr X’s confusion. However, this alone is not sufficient to amount to fault.
70. I have not reviewed the Council’s handling of Mr X’s grant application at Address A as this was not the subject of his complaint to the Ombudsman. Further, the Council paid the grant at Address A and we would not consider complaint handling as a stand alone issue.

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Final decision

71. I have completed my investigation. This is because I find no evidence of fault in the Council’s decision to refuse Mr X a grant for his business at Address B.

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Investigator's decision on behalf of the Ombudsman