Summary: Ms Z, on behalf of Mr X, complained the Council failed to use its discretion to award the Small Business Grant after amending his liability at another premises and awarding small business rate relief. There is no fault by the Council as no changes were made to the rating list for Mr X’s business premises and so no requirement for the Council to consider exercising discretion.

The complaint

1. Ms Z, on behalf of Mr X, complained the Council failed to use its discretion to award the Small Business Grant after amending his liability at another premises and awarding small business rate relief.
2. Mr X says he has experienced financial hardship as a result.

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The Ombudsman’s role and powers

3. 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)
4. 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)
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. As part of the investigation, I have:
• considered the complaint and the documents provided by the complainant;
• made enquiries of the Council and considered the comments and documents the Council provided;
• discussed the issues with the complainant;
• sent my draft decision to both the Council and the complainant and invited their comments.

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What I found

7. Small Business Rate Relief
8. Small business rate relief (SBRR) is applied if business premises have a rateable value of less than £15,000 and, in most cases, if the business uses only one property.
9. If relief is applied, then any business with premises with a rateable value of less than £12,000 will pay no business rates.

Small Business Grant

10. In March 2020, in response to the COVID-19 pandemic, the government created schemes for councils to pay grants to small businesses. These included the Small Business Grant Fund (SBG).
11. To receive the SBG a business had to be in receipt of small business rate relief (SBRR) or rural rates relief. Eligible businesses would receive a grant of £10,000.
12. Government guidance on eligibility for the SBG scheme said:

• “Any changes to the rating list (rateable value or to the hereditament) after 11 March 2020 including changes which have been backdated to this date should be ignored for the purposes of eligibility.
• Local authorities are not required to adjust, pay or recover grants where the rating list is subsequently amended retrospectively to 11 March 2020.
• In cases where it was factually clear to the Local Authority on 11 March 2020 that the rating list was inaccurate on that date, Local Authorities may withhold the grant and/or award the grant based on their view of who would have been entitled to the grant had the list been accurate.
• This is entirely at the discretion of the Local Authority and only intended to prevent manifest errors”.

Key facts

13. Mr X was the named rate payer at two separate business addresses on 11 March 2020. Mr X applied for a Small Business Grant in respect of property A, the address from which he runs a lettings agency. The Council refused his application saying that he was not entitled because he was also the liable party at property B.
14. Mr X spoke to a Council officer, and it was ascertained during that conversation that Mr X’s son should be the named business rate payer at property B. The Council actioned this change on 4 June and made Mr X’s son liable for the business rates at property B from 10 January 2019.
15. Mr X applied for Small Business Rate Relief at property A which was awarded and backdated to 10 January 2019. Mr X then asked the Council to reconsider his eligibility for the SBG on the basis he was now in receipt of SBRR.
16. The Council wrote to Mr X on 25 June saying it had reviewed his case but the decision regarding ineligibility for the grant had not altered. It explained that he did not meet the criteria for any of the rate reliefs required for the grant as at the qualifying date of 11 March 2020. It said Mr X did not qualify for SBRR because he was held liable at a different address.
17. Ms Z wrote to the Council on behalf of Mr X on 29 June. Ms Z said the Council’s decision to refuse the SBG was based on incorrect information. She explained that while Mr X did not originally receive SBRR on the qualifying date of 11 March 2020, he did now receive the relief and it had been backdated to 2019. She said this is Mr X’s only business premises and this was his only claim. In her letter, Ms Z quoted the government guidance which stated “changes made to a business’s rateable value or rating assessment after 11 March 2020 will not affect eligibility”.
18. The Council referred the decision to a senior officer for reconsideration who wrote to Mr X. The Council’s response commented on the extract from Government guidance mentioned by Ms Z. The Council said the guidance stated that any changes to the rating list made after 11 March 2020, including backdated changes, should be ignored for the purposes of eligibility. However, it noted that no changes had been made to the entry in the rating list for property A and so this part of the guidance was not relevant for this case.
19. The Council again confirmed its decision that on the qualifying date of 11 March 2020, Mr X was not eligible for SBRR as he was held as the liable party on more than one business rates account.
20. Mr X then contacted his MP for assistance. Mr X explained to the MP that he was never liable for the rates at property B and this was an error. The Council wrote to the MP on 27 August explaining its decision. It explained that changes to the business rates account at property B were not actioned until 4 June 2020. It said that prior to this date, Mr X was not entitled to rate relief at property A because he was also liable for business rates at property B. It said Mr X’s liability at that hereditament (property B) prevented him from meeting the criteria for the relief.
21. Mr X contacted the Council again saying it was an error to say he was ever liable at property B and that he did meet the criteria for the SBG at property A. The Council responded on 16 September. It said it had reviewed the business rates records and confirmed Mr X had been held liable at property B for the period 3 August 2018 to 9 January. It said changes were made to the business rates account on 4 June when Mr X confirmed his son’s business operated from property B and he was responsible for the business rates from 10 January 2019.
22. The Council said that it was not until after Mr X made his application for the SBG at property A that he mentioned the liability at property B was in the wrong name. It said no information was provided prior to this to advise the liable party for the business rates was incorrect, despite business rates demand notices being issued in Mr X’s name. The Council said government guidance for the grant scheme confirmed the grant recipient will be the person who according to the billing authority’s records was the ratepayer in respect of the premises on the scheme eligibility date of 11 March 2020 and is in receipt of one of the qualifying reliefs. It said as the SBRR was awarded after the qualifying date of 11 March 2020, Mr X did not meet the criteria confirmed in the government guidance which is why the grant is not payable.
23. Dissatisfied with the Council’s response, Ms Z complained to the Ombudsman on behalf of Mr X.

Analysis

24. Mr X complains the Council has not paid him the SBG in respect of his business premises. Mr X says that while he was not in receipt of SBRR on 11 March 2020 at property A, this was due to an error which has now been rectified and a backdated award of SBRR has been made. Mr X says as this back dated award includes 11 March 2020, the Council should have paid the grant.
25. I am satisfied Mr X was the named person on the business rates at both property A and property B on 11 March 2020. Mr X says that he was not liable for property B and the bill should have been in his son’s name. There is no evidence Mr X had tried to rectify this or that he had tried to claim SBRR at property A prior to April 2020.
26. In June 2020, the Council altered the business rate account details at property B and Mr X’s son became the liable party from 10 January 2019. No changes were made to the account details for property A. Mr X then applied for, and was awarded, SBRR at property A backdated to 10 January 2019.
27. I find no fault by the Council in taking these actions. New information was presented and it acted accordingly. This complaint is about whether these changes, made in June 2020, also affected the decision to refuse Mr X’s application for the SBG for property A.
28. Mr X is applying for the SBG in respect of property A. The Council has not made any changes to the rating list for this property. Mr X was not in receipt of SBRR for property A on 11 March 2020 and so is not eligible for the SBG. The only changes made to the ratings list were in relation to property B.
29. The guidance and frequently asked questions issued by the Government in respect of the SBG does mention backdated changes to the ratings list and that the Council has discretion where it knows the record was incorrect on 11 March 2020. However, the guidance and frequently asked questions are silent on what a council should do in cases like this. The rating list for property A was not incorrect on 11 March and has not been amended. Therefore I find no fault in the Council’s decision to refuse the SBG and no fault in failing to consider exercising discretion to award the SBG.

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Final decision

30. I will now complete my investigation as there is no evidence of fault by the Council in this case.

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Investigator's decision on behalf of the Ombudsman