Summary: Mr D complained the Council refused his business a Restart Grant to support it in re-opening following the easing of COVID-19 restrictions in April 2021. We do not uphold the complaint, finding no fault in the Council’s decision.

The complaint

1. I have called the complainant ‘Mr D’. He complains the Council refused his business a restart grant to support it in re-opening following the easing of COVID-19 restrictions in April 2021. Mr D says the business missed out on financial support at a time when it needed it.

Back to top

The Ombudsman’s role and powers

2. 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)
3. 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. 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)

Back to top

How I considered this complaint

6. Before issuing this decision statement I considered:

• Mr D’s written complaint to the Ombudsman and any supporting information he provided;
• correspondence between Mr D and the Council about the matters covered by the complaint, pre-dating our investigation;
• comments and further evidence provided by the Council in reply to our enquiries;
• relevant national guidance as referred to in the text below.

7. I also gave Mr D and the Council a chance to comment on a draft of this decision statement. I took account of any comments made on the draft, before I finalised this statement.

Back to top

What I found

Restart Grants

8. In March 2021, the Government announced it would give funding to councils to support businesses re-opening following the lifting of restrictions brought in because of the COVID-19 pandemic. In April 2021 it produced guidance on Restart Grants explaining how councils should administer these.
9. The guidance said Restart Grants were to support hospitality, accommodation, leisure, personal care and gym business premises with one-off grants up to £18,000. The amount of grant a business could receive depended on the rateable value of the premises it used.
10. The guidance said: “the primary principle of the Restart Grant scheme is to support businesses that offer in-person services, where the main service and activity takes place in a fixed rate-paying premises, in the relevant sectors”.
11. The guidance set out definitions for each sector of the economy the Government wanted to support. It defined a gym and sport business as one “where physical exercise or training is conducted on an individual basis or group basis using exercise equipment or open floor space with or without instruction or where individual and group sporting, athletic and physical activities are participated in competitively or recreationally”.
12. It went on to say councils could use the following criteria to assess whether a business was eligible for a grant under this definition:

• businesses that offer in-person exercise and sport activities to the general public;
• businesses that open to members of the public paying an entry or membership fee;
• businesses that require extensive cleaning protocols, which significantly slow down trade;
• businesses that offer exercise classes or activities, which may mandate space and no masks etc.

13. The guidance defined personal care businesses as those which provide “a service, treatment or activity for the purposes of personal beauty, hair, grooming, body care and aesthetics, and wellbeing”.
14. It went on to say councils could use the following criteria to assess whether a business was eligible for a grant under this definition including:

• businesses that offer close-contact services which are required to deliver the treatment;
• businesses that offer services, treatments or activities that require social distancing and cleaning protocols, which have led to a reduction in their capacity to deliver personal care services.

15. The guidance also said a personal care business did not include one providing medical or health services.
16. The guidance provided an Annex which listed businesses considered to fall within each sector. However, the guidance said this was “indicative” and that councils had to use “local knowledge and the definitions and criteria […] to assist in making a decision on eligibility of a business for this scheme”. Councils were told that if it was not “materially clear” that a business fell into one of the categories the Government wanted to support then they had discretion to decide if the business was eligible.

Key facts

17. Mr D runs his own business as a fitness and nutrition consultant. As part of his business, he rents an office on which he is charged business rates. He uses the office for face-to-face meetings with clients. The office does not contain any gym equipment such as treadmills or rowing machines but has some hand-held weights. He told me that during consultations he might ask clients to carry out some exercise so he can assess their capability. For example, Mr D might ask a client to perform stretching exercises. Following an assessment Mr D will produce a personalised fitness and diet plan for his clients. As well as these one-to-one sessions Mr D advertises his services as including running group training sessions, competition preparation and ‘bootcamps’.
18. In April 2021 Mr D applied to the Council for a Restart Grant. He completed his first form incorrectly saying he had not been trading on 1 April 2021. His complaint concerns how the Council dealt with a subsequent application after he submitted a second form having corrected this error.
19. The Council used a standard form for Restart Grant applications. This asked applicants for personal details, their rates account number, company registration number and so on. It asked applicants which business category their business fell within and Mr D said his business was in the ‘gyms and sport’ category. He provided telephone and email contact details.
20. In May 2021 the Council refused Mr D’s application. It said that he did not offer a mainly in-person service from the office where he pays rates.
21. Mr D asked the Council to reconsider its decision. He explained he provided a fitness and nutrition consultancy. This involved seeing clients in person. He enclosed photographs which included a notice board showing the services he provides and the cost of those; pictures of his office showing books on fitness and exercise and a small selection of weights.
22. The Council replied and again refused the Restart Grant. It said Mr D’s premises were an office and an office could not be considered like a gym or similar premises.
23. Mr D asked for a further reconsideration. In its final response the Council said that his business did not fall within any of the business sectors eligible for a grant.

My investigation

24. I asked the Council if it could provide any evidence of any further reasoning to explain why it refused Mr D a restart grant. For example, the notes of any contact it made with Mr D or any notes kept by officers. The Council advised it did not make enquiries or ask Mr D for any information in support of his application. Its officers kept no notes and so the only explanation for the decisions is that enclosed in the responses sent to Mr D.
25. I also asked the Council if it had given any consideration to whether Mr D ran a ‘personal care’ business as opposed to a ‘gym and sport’ business. The Council said in response Mr D had “provided a number of photos in support of his application, but specifically omitted photographic evidence of facilities that would enable him to provide a service that would make him eligible for a Restart Grant at the rateable premises”.

My findings

26. The Council has three times refused Mr D a Restart Grant. It has not provided consistent reasoning for its decision. But has over time, advanced the following reasons:

• that Mr D does not offer a mainly in-person service from the office he rents (its first explanation for refusal);
• that he rents an office and this cannot be considered like a gym or similar premises (its second explanation for refusal);
• that his business does not fall within any of the sectors eligible for a grant (its third explanation for refusal).

27. The Council’s further comments to this office suggest it now relies on a combination of the second and third explanation given for its refusal. I have therefore approached my findings on that basis, noting that Mr D has explained he uses his office for face-to-face consultations and the Council has not disputed that.
28. In this case I would have preferred to see the Council seek more explanation from Mr D about the business he operates. I consider this would have enabled it to provide a more robust decision and to have cross-referenced that to the guidance I have set out above. But while its decision making fell short of best practice, I do not consider the Council is at fault for refusing Mr D a Restart Grant.
29. In explaining its decision, the Council has put an emphasis on considering the space used by Mr D. I note there is nothing in the guidance that prevented it paying a grant because a business used an office rather than other premises. However, it was relevant to consider the type of premises used when the Council applied itself to the tests set out above. This is because the guidance required the Council to consider not just the nature of the applicant’s business but how they used their premises. The guidance said that to receive a grant a business must carry out its ‘main service and activity’ in those premises. While the category definitions also required the Council to consider what business activity took place in the premises.
30. Taking account of the above, I can find no fault in the Council reaching the view that Mr D’s business did not meet the definition of one in the ‘gym and sport’ category. This is after I note that while Mr D meets clients in person at his office he does not provide them with in-person exercise in that setting. So, he does not use his business premises for physical exercise or training on an individual basis using exercise equipment or open floor space (the definition quoted in paragraph 11 refers). Nor do his business premises require extensive cleaning protocols and nor does he carry out activity at those premises requiring space or where masks cannot be worn (the criteria quoted in paragraph 12 refer).
31. I am disappointed the Council did not also consider if Mr D provided a personal care service for individual wellbeing (paragraph 13 refers). Its form gave businesses no opportunity to explain the detail of what services they provided or how they used their premises. Had the Council made enquiries it may have gone on to consider if Mr D’s business belonged in this category instead.
32. But on balance, I am not persuaded Mr D’s business would meet the definition or criteria provided by Government and summarised in paragraphs 14 and 15. Mr D is not providing a ‘close contact’ service, nor one that requires extensive cleaning protocols. Further, having considered the guidance quoted in paragraph 15, I find the Government did not intend these grants be given to those giving health advice, which could include advice on diet and nutrition.
33. Finally, I note the Council did have some discretion to award Restart Grants to a business if it was not ‘materially clear’ they fell within the definitions of eligible businesses discussed above. I find this required the Council to consider using discretion in a case where it might be argued either way that a business could meet one of the definitions of eligibility. But I do not consider the Council under an obligation to consider using discretion in a case where it found no grounds to think a business met one of the definitions of eligibility. So, it follows from my findings above, that I can find no fault in the Council not considering its use of discretion in this instance.

Back to top

Final decision

34. For the reasons set out above, I do not uphold the complaint as I find no fault in the Council’s decision to refuse Mr D a Restart Grant. I therefore complete my investigation satisfied with its actions.

Back to top

Investigator's decision on behalf of the Ombudsman