Summary: Mr X complained the Council wrongly refused a COVID-19 business grant. There was no fault in the Council’s decision making.

The complaint

1. Mr X complained the Council wrongly refused the Local Restrictions Support Grant (LRSG). He said it initially refused the grant without asking for details of the business. He considered the business did meet the criteria because it could not provide its usual in-person services during the second national lockdown. However, he said the Council had not understood the Government Guidance.
2. Mr X said that, as a result of the lack of grant support, he suffered stress and the business suffered financial loss.

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

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What I found

Government Guidance

Local Restrictions Support Grant (Closed) Addendum (LRSG)

8. 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.
9. 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.

Additional Restrictions Grant (ARG)

10. The Government also provided discretionary funding for councils to support businesses that were required to close or had been severely impacted by the second national lockdown.
11. The Guidance, issued on 4 November 2020, said councils could decide how much funding to provide to businesses and which businesses to target. Councils could use the funding to support businesses that were important to its local economy.
12. The Guidance also said:

“In taking decisions on the appropriate level of grant, [councils] may want to take into account the level of fixed costs faced by a business in question, the number of employees, whether they are unable to trade online and the consequent scale of coronavirus losses”.

13. This Council’s discretionary scheme was decided in line with Government Guidance. To be eligible, the business must:
• Be trading in Kirklees;
• Have been open and trading as usual before the restrictions;
• Have been legally required to close or have been significantly impacted by local restrictions from 5 November 2020. Businesses not forced to close will be required to provide evidence demonstrating a significant impact on turnover/sale as a result of stricter social distancing being implemented;
• Be operating in one of more of the following sectors:
1. independent non-essential retail;
2. leisure;
3. hospitality;
4. visitor accommodation;
5. personal care and close contact services;
6. retail, hospitality. leisure supply chain;
7. entertainment and tourism (including events and supply chain businesses); and
8. community facilities/centres, including faith-based venues.

What happened

14. Mr X operates a business that offers a range of personal services, including massage and physiotherapy, as well as medical and psychological consultations.

Local Restrictions Support Grant (LRSG)

15. Mr X applied for this grant on 1 December 2020. On the application form he said the business was a retail business, specifically a medical agency.
16. The Council refused the grant on 10 December 2020. It said:
• the business was not retail, as stated on the application;
• the premises were offices;
• the grant was only available to those business that were required to close due to national restrictions from 4 November to 2 December 2020, and were unable to provide their usual in-person customer services from their premises.

It provided a link to further information on the Gov.UK website.

17. Mr X emailed the Council on 14 December 2020. He confirmed the business was closed because it could not arrange for clients to meet medical professionals from 5 November 2020.
18. The Council replied on 21 December 2020. It said the VOA rating list showed the property was classed as “office and premises”. If that was not the case, Mr X would need to provide evidence of the use of the property before the Council could reconsider its decision to refuse the grant.
19. Mr X emailed again on 29 December 2020. He said he disagreed with the decision. The business dealt with clients face to face and some close contact was needed where medical examinations were required.
20. The case was referred to the Council’s reconsideration team. On 16 December 2020 the team asked him to explain the nature of the business and provide evidence to support this.
21. On 4 March 2021 Mr X replied that the business dealt with clients face to face, in some cases providing hands on treatments, including medical examinations. It also arranged psychological consultations and physiotherapy treatments.
22. The reconsideration team considered the information Mr X provided and responded on 5 March 2021. It said physiotherapists and medical practices were not required to close and so were not eligible for the grant. Therefore, its original decision would stand and there was no further right of appeal. However, if the business was significantly impacted by the COVID-19 restrictions, Mr X could apply to its ARG discretionary scheme. The Council could consider if the business was eligible based on the information he had provided.
23. Mr X was unhappy with the decision and complained on 31 March 2021. He said:
• the Council had initially rejected the application without asking about the nature of the business;
• the business saw clients face to face, offering hands on massage and various treatments, including medical examinations, psychological consultations and physiotherapy treatments;
• he considered the business met Government criteria, and that Council staff did not know or understand Government Guidance;
• the Council was wrong to suggest he should apply for a discretionary grant; and
• other similar businesses he knew of, operating in the same building, had received the grant.
24. On 22 April 2021, the Council’s reconsideration team asked Mr X to:
• tell it exactly what the business does and what the day-to-day business entailed, and provide proof of this;
• explain what the main business was, if not physiotherapy and medical services, and provide evidence of this;
• confirm which sector Mr X believed the business came under based on the Government Guidance, and why; and
• explain whether anyone officially told him the premises had to close, such as environmental health, and whether he had sought any advice about this.

It said it could not comment on other grant applications.

It asked Mr X to provide the information by 30 April 2021. Mr X did not respond.

Discretionary grant

25. The Council considered whether the business was eligible for a discretionary grant based on the information Mr X had already provided. It wrote to him on 13 May 2021 refusing the grant because the business did not operate in one of the eligible sectors.

My findings

LRSG

26. 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.
27. The regulations said that spas, nail and beauty salons had to close, as did massage parlours. However, medical services, including services relating to mental health were expressly permitted to remain open. Offices were also allowed to remain open, although staff were advised to work from home where possible.
28. The VOA rating list indicated Mr X’s business property was “offices and premises”. Since offices were not required to close, the Council was not at fault for initially refusing the grant without asking for further information from Mr X.
29. When Mr X challenged the decision, the Council asked for further information and evidence. Mr X said several times the business provided in-person services but did not explain which sector he considered it fell under in relation to the Government Guidance, nor did he provide any supporting evidence to show the nature of the business and what the main activities were.
30. The Council applied the correct criteria, asked for appropriate information and considered the information Mr X provided. In the absence of evidence to show otherwise, it decided its original decision should stand. There was no fault in the way it considered this.

Discretionary grant

31. The Council also considered whether the business was eligible for a discretionary grant. It refused this on the grounds the business did not operate in one of the eligible sectors. Medical services were not listed as one of the eligible sectors in the Council’s scheme (see paragraph 13, above). There was no fault in the way the Council considered this application, which was decided in line with its published scheme.

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Final decision

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

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Investigator's decision on behalf of the Ombudsman