Summary: Mr X complained the Council wrongly refused him business grants and was poor in its communications, causing him distress and financial loss. We found fault in the Council’s decision making and communications causing injustice. We recommended the Council provide an apology, pay Mr X for distress, time and trouble, review its decision and act to prevent recurrence.

The complaint

1. Mr X complains the Council wrongly refused him business grants and was poor in its communications, causing him distress and financial loss.

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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 their comments before making a final decision.

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What I found

Business grants

8. The Government created various grants schemes to support businesses during the COVID-19 pandemic. It issued guidance to councils to help them administer these schemes.

Local Restrictions Support Grant (Closed)

9. This grant applied from 9 September to 5 November 2020.
10. Eligible businesses were those trading as usual and then ordered to close.
11. The Health Protection (Coronavirus, Local COVID-19 Alert Level) (Very High) (England) Regulations 2020 schedule 1 part 2 set out the types of businesses required to close. This included restaurants, cafés, bars and indoor attractions. There was no requirement for travel agents, tour operators or offices to close.
12. Exclusions to funding included businesses that could still conduct their main service because they did not depend on providing direct in-person services from premises and could operate their services effectively remotely (e.g. accountants, solicitors).

Local Restrictions Support Grants (Closed) Addendum

13. This grant applied from 5 November to 2 December 2020.
14. Eligible businesses were those ordered to close. This included non-essential retail, leisure, personal care, sports facilities and hospitality businesses.
15. The Health Protection (Coronavirus, Restrictions) (England) (No. 4) Regulations 2020 in effect on 5 November 2020 set out those businesses ordered to close. There was no requirement for travel agents, tour operators or offices to close.

Local Restrictions Support Grants (Closed)

16. This grant applied from 2 to 19 December 2020.
17. Eligible businesses were those trading as usual and then ordered to close.
18. The Health Protection (Coronavirus, Restrictions) (All Tiers) (England) Regulations 2020 (SI 2020/1374) took effect from 2 December 2020. Schedules 2 and 3 listed those business required to close. There was no requirement for travel agents, tour operators or offices to close.
19. Exclusions to funding included businesses that could conduct their main service because they did not depend on providing direct in-person services from premises and could operate their services effectively remotely (e.g. accountants, solicitors).

Local Restrictions Support Grants (Closed) Addendum – Tier 4

20. This grant applied from 19 December 2020 to 31 March 2021.
21. Eligible businesses were those ordered to close. This included non-essential retail, leisure, personal care, sports facilities and hospitality businesses.
22. On 20 December there was no requirement for travel agents, tour operators or offices to close. However, on 6 January 2021 the Government amended the list of businesses required to close under schedule 3a part 3 para 15 of The Health Protection (Coronavirus, Restrictions) (All Tiers) (England) Regulations 2020 to include retail travel agents.

Local Restrictions Support Grants Open

23. This grant applied from 2 December 2020 to 31 March 2021.
24. Eligible businesses were those still open but severely impacted by Tier 2 or Tier 3 restrictions. Councils had the freedom to decide the eligibility criteria. However, the Government expected councils to support hospitality, hotel, bed & breakfast and leisure businesses.

Additional Restrictions Grants (ARG)

25. The Government gave councils further funding for business support activities. Councils had the freedom to decide the eligibility criteria. However, the Government encouraged councils to support those sectors that remain closed or were severely impacted by the extended restrictions.

Restart grants

26. This grant opened from 1 April 2021 to 30 June 2021.
27. It was available to businesses in the non-essential retail, hospitality, accommodation, leisure, personal care or gym sectors.
28. The primary principle of the Restart Grant scheme was to support businesses that offered in-person services, where the main service and activity took place in a fixed rate-paying premises.
29. Councils were told to use their local knowledge and the definitions and criteria set out to decide on eligibility.
30. The Government defined a non-essential retail business as one used mainly or wholly for the purposes of retail sale or hire of goods or services by the public, where the primary purpose of products or services provided are not necessary to the health and well-being of the public. Its list of these businesses included travel agents. It excluded office buildings.
31. Councils could use the following criteria to assess whether a business was eligible:
• Businesses offering in-person non-essential retail to the general public.
• Businesses that were likely to have been required to cease their retail operation in the January 2021 lockdown.
• Businesses that had retail services restricted during January lockdown.
• Businesses that sell directly to consumers.

Principles of good administrative practice

32. In 2018 the Ombudsman published a guidance document setting out the standards we expect from bodies in jurisdiction “Principles of Good Administrative Practice”. We issued an addendum in response to the COVID-19 pandemic; “Good Administrative Practice during the response to Covid-19”. This shows we expected similar standards from councils, even during crisis working. Our expectations include:
• Explaining clearly the rationale for decisions and recording them
• Having clear and accessible appeal routes
• Providing clear and timely information on how and when to appeal or complain

What happened

33. On 2 December Mr X applied for the Local Restrictions Support Grant (Closed) (“LRSG closed”) grant. On the application form he recorded he worked in “travel, tourism, hospitality, normally for public walk in”. When I spoke to Mr X he explained there was a drop down menu and this was the closest fit.
34. On 11 November the Council refused Mr X a grant as it considered his business could continue to trade and was not affected by local restrictions. It was therefore ineligible under Government guidance. It said it would soon open its ARG scheme.
35. Mr X disputed the Council’s decision. He referred to Government guidance on the LRSG Closed Addendum that said the Government would support businesses required to close due to national restrictions and unable to provide their usual in person services. This could include non-essential retail businesses, leisure, personal care, sports and hospitality. It could also include those that primarily operate an in person service but have been forced to close and operate a takeaway service. Mr X said he did not have tools to work remotely and relied on providing in person services from the premises. He said travel/hospitality businesses were not specifically excluded from the grant scheme and the Council’s own guidance said it would support those working in travel/hospitality.
36. The Council explained the Government said businesses that provide services rather than goods were not required to close unless on the list of businesses subject to restrictions. The list of businesses did not include travel agents. Therefore, he was not entitled to a LRSG Closed grant but he may wish to apply for an ARG.
37. On 13 January 2021 Mr X queried if he was entitled to the LRSG Open grant. He also said it appeared his business was not eligible for the ARG as he paid business rates. He queried if this was correct.
38. On 2 February the Council told Mr X the rates bill was in his name rather than the business’ name. It said if he could provide evidence he was personally trading as a travel agent by way of brochures, advertising, invoices etc, it would reconsider his eligibility for the LRSG Closed grant. It could not pay a third party and his application did not say he was a travel agent. It referred him to another team for advice on the ARG. I note the Council did not explain why it would now consider grants for travel agents, when it previously refused. It also did not address Mr X’s query on the LRSG Open grant.
39. Mr X sent the Council a business card showing he was director of the business; an invoice for a website addressed to him; a receipt for office equipment, and an ATOL licence in the name of the business.
40. In its response, the Council did not comment on whether the evidence showed Mr X was personally trading as a travel agent. However, the Council told Mr X he had not shown that a sizeable amount of his business was generated from visiting customers, rather than being an internet based tour business operating from an office. I note it did not then ask Mr X for evidence he generated business through visiting customers or, say what evidence Mr X should provide.
41. Mr X responded that he was not an internet based tour operator and was not set up to work remotely or online. He had provided the documents requested and would provide any further information on request.
42. Mr X chased the Council for a response on 20 March 2021.
43. When I spoke to Mr X he said he spent time contacting his MP and other business advice groups seeking support in contacting the Council.
44. In April 2021 Mr X applied for a Restart grant.
45. On 27 May Mr X contacted his MP seeking support. He explained his sector was greatly affected by the pandemic and he could not operate remotely. He had provided relevant information to the Council yet it had refused a grant and provided contradictory information. On the same date his MP asked the Council to review Mr X’s grant applications.
46. On 3 June the Council responded to Mr X’s MP. It explained the LRSG was only available to businesses forced to close. Mr X operated as a travel agent from an office; his business was not forced to close and so he was not eligible for a grant. Similarly, the Restart Grant was only available to those forced to close. I note this appears contrary to the law as of 6 January 2021 that required retail travel agents to close.
47. Mr X’s MP passed the Council’s response onto him.
48. On 12 June 2021 Mr X complained to the Council. He enclosed documents exchanged and referred to information reporting travel agents were now eligible for grants.
49. The Council has provided a copy of an inspection report dated 30 June 2021, with accompanying photos. This reports on Mr X’s premises. The Council found there was no access from the main gates. There was an intercom with company names but this did not include Mr X’s business’ name. The Council officer called reception but there was no answer. The Council officer reported they called Mr X who said he was not in the office and only attended when clients made an appointment. The officer considered this was an office and so not entitled to a grant.
50. The Council responded to Mr X in July. It explained to be eligible for the LRSG Closed the business had to be legally forced to close because of national restrictions. His business was not legally forced to close as his premises was based in an office rather than a high street shop and was not open to visiting members of the public. Further, because his business was not classed as non-essential retail he was not eligible for the Restart grant. However, the Council said Mr X may be eligible for the ARG and referred to its website.
51. When I spoke to Mr X he said the Council did not tell him about the Ombudsman; he only found out about the Ombudsman after taking legal advice.
52. The Council told the Ombudsman the Valuations Office rated the property as 'Offices and Premises'. The Government did not force offices to close and they could remain open to trade online. Office based businesses that were not open to members of the public were not classed as non essential retail. It referred to its inspector’s report which confirmed the property was an office and not used for walk in members of the public. It said it had asked Mr X to supply documentation to confirm visiting members of the public used the property and therefore fell under non essential retail but it did not receive any documents.
53. I asked the Council for a copy of correspondence exchanged and a record of calls. On review I found no evidence the Council had asked Mr X to show visiting members of the public used the property.
54. In comments on a draft of this decision Mr X provided copies of his communications with third parties, seeking support in his dealings with the Council. He said this evidenced how stressful and exhausting the process had been for him, because of the Council’s poor communications.
55. Mr X also commented:
• On 2 February 2021 he spoke to the Council officer who dealt with his case previously. They told him they would pay him the grant if it was up to them but that Mr X should speak to a manager.
• He always said he worked in travel. He does not think the Regulations ever changed; rather that travel agents were always entitled to a grant. On 2 February the Council asked for evidence he traded as a travel agent despite him saying this from the start.

Findings

56. I have set out relevant law and guidance at paragraphs 9 to 31. These summarise the rules in place at the relevant times and are taken from reputable sources. Therefore, while I acknowledge Mr X believes travel agents were always eligible for grants, this was not the case. Rather, the law changed on 6 January 2021 to include travel agents as eligible businesses.
57. The Council initially refused Mr X an LRSG Closed grant as this was only available to businesses ordered to close and his business was not. I am satisfied the Council decided in line with the law and Government guidance at the time. I therefore find no fault.
58. When Mr X disputed the Council’s decision, with reference to the LRSG Closed Addendum scheme, the Council did not address this specific scheme in its response. This is fault that caused Mr X uncertainty. However, I am satisfied the Council would have found him ineligible for a grant under this scheme for the same reason. I therefore find no further injustice.
59. The Council did not address Mr X’s query whether he may be entitled to the LRSG Open. This is fault that caused Mr X uncertainty. However, he could have applied if he wished, so I cannot say this caused further injustice.
60. In February 2021 the Council asked Mr X to evidence he was trading as a travel agent. It did not explain why it needed this information. However, I consider this was likely because retail travel agents were now eligible for the LRSG Closed following the rule change of 6 January 2021.
61. Mr X then provided the Council with evidence to show he traded as a travel agent. In its response, the Council:
• did not comment on whether this evidence was adequate or not, with reasons for its view;
• refused the LRSG Closed grant because Mr X had not shown most of his business came from visiting customers. However, it had not previously asked him to evidence this;
• said Mr X was an internet based business, seemingly ignoring his previous comments that this was not the case and;
• did not tell Mr X how he could appeal or give him the chance to provide further information.
62. The Council did not follow a proper decision making process or provide a clear and accessible appeal route. This is fault that caused Mr X distress and uncertainty. He also missed the opportunity to evidence he was eligible for the LRSG Closed grant.
63. Mr X disputed the Council’s decision in March but it did not respond. This is fault. It is clear Mr X suffered distress and uncertainty as he then sought support from his MP and others. Mr X also spent longer pursuing his complaint with the Council than necessary.
64. Upon Mr X’s complaint the Council refused the LRSG Closed grant again as it decided his premises was an office and not open to the public. However, the Council:
• did not outline the rationale for this view, with reference to relevant evidence;
• did not comment on the points raised by Mr X, in support of payment;
• did not give Mr X a chance to challenge its decision or otherwise allow a right of review. And, it did not refer him to the Ombudsman.
65. The Council did not follow a proper decision making process or provide a clear and accessible appeal route. This is fault that caused Mr X distress and uncertainty. And he again missed the opportunity to evidence he was eligible for the LRSG Closed grant.
66. The Council refused Mr X a Restart grant because it had decided Mr X worked from an office and his business was not non-essential retail. However, it did not outline the rationale for this view, with reference to relevant evidence. And it did not give Mr X a chance to challenge its decision or otherwise allow a right of review. This is fault that caused Mr X distress and uncertainty. He also missed the opportunity to evidence he was eligible for the Restart grant.
67. The Council’s fault, by way of its poor communications with Mr X, also meant he was put to avoidable time and trouble pursuing a complaint with the Ombudsman.

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Agreed action

68. To remedy the injustice set out above I recommend the Council carry out the following actions:
69. Within one month:
• Provide Mr X with a written apology;
• Pay Mr X £300 for distress and uncertainty;
• Pay Mr X £150 for time and trouble;
• Allow Mr X the opportunity to show he operates as a retail travel agent, providing services to visiting members of the public and;
1. Upon such evidence consider whether Mr X would have been entitled to the LRSG Closed and/or Restart Grant and;
2. Write to Mr X with its decision and reasons and;
3. If Mr X would have been entitled, pay him an amount equivalent to those grants.
70. Within three months:
• Remind those staff deciding grant awards of the importance of considering evidence, explaining their decisions and explaining how to appeal or complain, in line with the Ombudsman’s Principles of Good Administrative Practice.
71. The Council has accepted my recommendations.

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Final decision

72. I find fault in the Council’s decision making and communications causing injustice. The Council has accepted my recommendations and I have completed my investigation.

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Investigator's decision on behalf of the Ombudsman