Summary: When considering Mr X’s application for the Local Restrictions Support Grant (closed) the Council used the wrong test as the government had clarified what it meant by the term “trading” in respect of these grant schemes. However, Mr X would not have been eligible for the grant even if the Council had applied the correct test.

The complaint

1. Mr X complained the Council refused his applications for COVID-19 business related grants.
2. Mr X says he has suffered financial hardship as a result of not receiving any grants.

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What I have investigated

3. I have investigated the complaint about the refusal of the Local Restrictions Support Grant (closed) (LRSG). I explain at paragraphs 19 and 20 below the parts of the complaint I have not investigated.

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The Ombudsman’s role and powers

4. 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)
5. 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”.
6. 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

7. As part of the investigation, I have:
• considered the complaint and the documents provided by the complainant;
• discussed the issues with the complainant;
• sent my draft decision to both the Council and the complainant and taken account of their comments in reaching my final decision.

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What I found

Local Restrictions Support Grant (closed)

8. From September 2020 onwards the government introduced schemes to support businesses during the national lockdown periods and periods of local restrictions. The schemes applied to businesses that had been trading and were then required to close.
9. In March 2021, the government clarified what it meant by the term “trading” and updated the guidance for all the LRSG schemes.

Key facts

10. Mr X bought a property in November 2019 which was trading as a pub. Mr X closed the premises with the intention of refurbishing them and re-opening as a pub. However, due to the COVID-19 pandemic and national lockdowns, the premises have remained closed and Mr X no longer intends to re-open it as a pub.
11. Mr X applied to the Council for the LRSG (closed) on 30 March 2021. On the application form Mr X said the business had been trading until the local lockdown restrictions came into force. On 7 April the Council asked Mr X to provide photographs of the inside and outside of the premises, which Mr X did.
12. The Council wrote to Mr X on 21 June 2021. It explained that it was unable to process his grant because the property is empty and under government guidelines empty properties are not eligible for any grant payments. Mr X replied stating “of course the property is empty, we have not been able to reopen due to lockdown restrictions”. Mr X asked how to contest the decision.
13. The Council emailed Mr X on 24 June, saying it had reviewed his application and that the reason he did not meet the requirements for the statutory scheme is because the business was not open immediately before the restrictions were put in place. It said the property has been unoccupied since 6 November 2019 and as an empty property it is not eligible for payments under this scheme. The Council said there was no further right of appeal and provided details of how to complain to the Ombudsman.

Analysis

14. I am considering the complaint about the refusal of the LRSG. The information provided shows Mr X made his application after the government updated the guidance and clarified what it meant by the term “trading”. The guidance clarified that a business was not required to be “open and trading” and councils were only required to consider whether the business was trading.
15. In its review decision letter the Council says it refused the grant because Mr X’s business was not open immediately before the restrictions were put in place. This is the wrong test. The Council should only have considered whether the business was trading but it does not say Mr X was not trading. Making a decision on the basis of whether the business was “open” rather than “trading” is fault.
16. As I have found fault, I have to consider how Mr X has been directly affected by this fault. I spoke to Mr X about this business property and what action he had taken since buying it in November 2019. Mr X told me that he had carried out some clearing work and that it was his intention to refurbish the building and reopen. However, the lockdowns changed his position and he says that he no longer intends to reopen the premises as a pub. When asked, Mr X confirmed that he has never traded from the building because of the state it was in when h purchased the building and the lockdowns.
17. So while I have found fault in how the Council determined Mr X’s LRSG application, I am not persuaded that any reconsideration using the correct criteria would result in a different decision. Mr X would need to demonstrate he was trading and he accepts he is unable to do this. I understand Mr X’s frustration that due to the timing of the lockdowns he has been unable to carry out his plans for this business and that the Council has continued to charge him for business rates. However, I am not persuaded that the fault in this case has resulted in Mr X missing out on grant funding he would otherwise have been given.

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Final decision

18. I will now complete my investigation as Mr X has not been caused a significant enough injustice as a result of the fault in this case to warrant further investigation.

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Parts of the complaint that I did not investigate

19. Mr X complained about the refusal of the Small Business Grant and Retail, Hospitality and Leisure Grant. Mr X knew on 27 April 2020 the Council had refused his application for these grants but did not complain to the Ombudsman until 12 July 2021. The Ombudsman expects complaints to be brought to him within 12 months of the person becoming aware that something had happened which affected them. Mr X did not complain to the Ombudsman within 12 months and there is nothing to suggest he could not have done this. This part of Mr X’s complaint is outside the Ombudsman’s jurisdiction.
20. It should also be noted that the property was classified as empty and Mr X was paying the empty rate charge. As a result he would not have been eligible for small business rate relief or the expanded retail discount scheme which are part of the eligibility criteria for these grants.

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Investigator's decision on behalf of the Ombudsman