Summary: Miss X complained about the Council’s decision to refuse a Small Business Grant resulting in the loss of this grant and a discretionary grant. We found fault in the Council’s handling of Miss X’s grant application. We recommended the Council provide Miss X with an apology, payment for time and trouble, and a payment of £10,000, equal to the missed grant. We also recommended it take action to prevent recurrence of the identified fault.

The complaint

1. Miss X complains about the Council’s decision to refuse her business a Small Business Grant. She says she has missed out on this grant and the discretionary grant because of the Council’s fault.

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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 may investigate matters coming to our attention during an investigation, if we consider that a member of the public who has not complained may have suffered an injustice as a result. (Local Government Act 1974, section 26D and 34E, 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 Miss X and I reviewed documents provided by Miss X and the Council.
7. I gave Miss X and the Council an opportunity to comment on my draft decision. I consider any comments before making a final decision.

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What I found

Valuation Office Agency

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 VOA rating list.

Liability for business rates

9. The Local Government Finance Act 1988 (LGFA 1988) identifies three categories of ratepayer:
• occupiers
• owners, and
• persons named in central rating lists.
10. Case law says the four conditions of rateable occupation are:
• actual occupational possession
• exclusive occupation or possession
• occupation or possession which is of some value or benefit to the occupier/possessor
• occupation or possession which has a sufficient quality of permanence.

Business grants

11. In response to the COVID-19 pandemic the Government introduced two grant schemes to support businesses. The Department for Business, Energy and Industrial Strategy published guidance for councils on how to apply these: “Grant Funding Schemes” (March 2020).
12. Businesses which, on 11 March 2020, received Small Business Rates Relief (“SBRR”) were eligible for a Small Business Grant (“SBG”) of £10,000.
13. Businesses which on 11 March 2020 would have received the Expanded Retail Discount were eligible for a Retail, Hospitality and Leisure Grant (“RHLG”).
14. Funding was payable to the person recorded as the ratepayer on 11 March 2020. However, where a council had reason to believe the information it held about the ratepayer on 11 March was inaccurate, it could withhold or recover the grant and take reasonable steps to identify the correct ratepayer.
15. A council had to ignore any changes to the VOA’s rating list after 11 March, including backdated changes. However, where it was factually clear to a council on 11 March that the rating list was inaccurate on that date, it could 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.

Discretionary grants

16. In May 2020 the Government introduced further support for businesses, including a discretionary grant fund. It published “Local Authorities Discretionary Grants Fund- guidance for local authorities”.
17. Councils could give a discretionary grant of £25,000, £10,000 or any sum under £10,000 to businesses which could not access other grant funding (other than the Job Retention Scheme). The value of the payment was at the council’s discretion.
18. The Government wanted councils to exercise their local knowledge and discretion and recognised economic need would vary across the country. It therefore set some national criteria for the funds but allowed councils to decide which cases to support within those criteria.

Council Discretionary Grant Fund

19. The Council published details of its discretionary grant scheme on its website. Businesses had to apply to access the scheme.
20. The Council supported small and micro businesses who were ineligible for the SBG or RHLG, had relatively high ongoing fixed property-related costs, and could demonstrate they suffered a significant fall in income due to the COVID-19 crisis.

Further grants

21. The Government introduced a range of grants over 2020 and 2021 to support businesses. It was up to each business to apply for any grant.

Principles of good administrative practice

22. In 2018 the Ombudsman published a guidance document setting out the standards we expect from bodies in jurisdiction “Guidance on 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.
23. Our expectations of councils include:
• Having clear and accessible appeal routes.
• Operating an effective complaints procedure, which includes offering a fair and appropriate remedy when a complaint is upheld.

Council powers

24. Section 92 of the Local Government Act 2000 says that where a council considers any action taken by it amounts to maladministration and, a person has been adversely affected by this, they can make a payment.

What happened

25. On 11 March 2020 all business rates accounts at Address A were in the name of Company A; the landlord.
26. In April 2020 Miss X applied for a SBG for her business at Address A.
27. The Council refused the grant because Miss X was not the recorded ratepayer on 11 March and her business was not in receipt of SBRR.
28. The Council says it sought advice from the Government. The Government confirmed if a business rates account was set up after 11 March 2020 a business could still claim the grant.
29. In August the Council asked Company A to provide leases for each business in occupation at Address A. Upon receipt it set up a business rates account for each business, including Miss X’s business.
30. On 18 August the Council sent Miss X forms for her to register her business for SBRR.
31. Miss X returned the forms on 27 August and the Council applied SBRR to her business rates account on 28 August.
32. On 27 August the Council sent Miss X a weblink for her to apply for the SBG again. Miss X says she used this and submitted her application. On the same day the Council told her it had sent her the wrong link and it would resend another.
33. On 28 August Miss X emailed the Council to say she had not received another weblink. However, the email was returned as undelivered. Miss X says she also called the Council but no-one she spoke to was able to help.
34. On 28 August 2020 the grant scheme closed.
35. Miss X says she chased the Council for an outcome to her application in November but received no reply.
36. On 12 April 2021 a solicitor complained to the Council on behalf of Miss X and other occupants at Address A. They complained the Council had not dealt with the applications properly and then had refused to consider these further once the scheme closed.
37. The Council replied directly to Miss X on 11 May. It said it had sent her the weblink to apply for the SBG on 27 August. It did not receive any application and so did not pay the grant. The scheme closed on 28 August and under Government guidelines it was not possible to consider any retrospective applications.
38. Miss X explained she had received a weblink and tried to complete the form but kept receiving a response that this had already been completed. She tried to contact the Council by email to no avail. She had tried to apply for the grant but was unable to do so due to the Council’s faulty IT system and lack of prompt communication.
39. The Council said it appeared the weblink did not work, possibly because Miss X had already applied for a grant in April 2020. It was due to send out a further email with a replacement link, but this did not happen at it should have. Miss X then emailed its “do not reply” mail which is why there was no response. However, its contact details were on its website. It apologised for the unforeseen technical issue. Having discussed with other stakeholders, it could not make any payments after the deadline. There was no formal appeals process on this decision. It could not consider her application retrospectively.
40. When I spoke to Miss X she said applicants had to be successful in obtaining the SBG in order to be considered for the discretionary grant. Subsequently, a failure to obtain the SBG also prevented her from receiving the discretionary grant. As such, her complaint covered both grants.

Findings

41. The Council initially refused Miss X a Small Business Grant as she was not the recorded ratepayer on 11 March 2020. I find no fault in its decision making.
42. The Council became aware its record of the ratepayer may not be accurate and it then took steps to identify the correct ratepayer. This was in line with Government guidance.
43. By 27 August 2020 the Council had recorded Miss X’s business as the ratepayer for the relevant period. It had also applied SBRR to her account. The Council still required Miss X to apply for the SBG. However, I am satisfied that upon receipt of this application the Council would have paid the grant.
44. The Council sent Miss X a weblink to apply for the SBG on 27 August. It accepts this did not work and that it failed to send a working link. This amounts to fault. As a direct result Miss X was unable to apply for the grant before the closing date. To remedy this fault the Council should pay Miss X a sum equivalent to the grant.
45. While I recognise councils were not expected to pay any grant after the scheme closed, this did not prevent councils from paying amounts equal to the grant where appropriate to remedy fault. And although the Council was not expected to have a formal appeals process we would still expect it to offer a right of review through its complaints process. In the circumstances, I consider the Council did not provide an appropriate remedy for accepted fault through its complaints process. This amounts to fault. Miss X was then put to time and trouble complaining to the Ombudsman.
46. There is no reason why the Council’s decision to refuse the SBG would have prevented Miss X applying for a discretionary grant. The Council published details of its scheme on its website and it was open to Miss X to apply if she wished. I therefore cannot say Miss X missed out on a discretionary grant because of the Council’s fault.

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Agreed action

47. To remedy the injustice set out above I recommend the Council carry out the following actions:
48. Within one month:
• Provide Miss X with an apology;
• Pay Miss X £100 for time and trouble;
• Pay Miss X £10,000, equivalent to the grant payment she missed.
49. Within three months:
• Share our Principles of Good Administrative Practice with staff to ensure they are aware we expect councils to offer a review or appeal and suitable remedies for accepted fault.
• Share this decision with other businesses at Address A and allow them to request a review of the Council’s decision on their entitlement to a business grant, if not previously provided.
50. The Council has accepted my recommendations.

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Final decision

51. I find the Council at fault in its handling of Miss X’s SBG application. The Council has accepted my recommendations and I have completed my investigation.

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Investigator's decision on behalf of the Ombudsman