Summary: Mr X complained the Council wrongly refused a COVID-19 business grant. The Council was at fault for not responding to an application for Small Business Rates Relief in April 2020, for which it will apologise. There was no fault in the way it considered the grant applications.

The complaint

1. Mr X complained the Council
• delayed in dealing with his application for a COVID-19 business grant;
• repeatedly ignored his communications; and
• wrongly refused to pay a grant.
2. He said the delays put him to additional time and trouble pursuing the Council and the lack of a grant payment added to the financial difficulties caused by the COVID-19 pandemic.

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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. 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. I considered:
• the information provided by Mr X and the Council; and
• relevant law and guidance, as set out below.
8. Mr X and the Council had an opportunity to comment on my draft decision and I considered their comments before making a final decision.

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What I found

Relevant law and Guidance

COVID-19 business grants

9. 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).
10. Grants were payable to the person recorded as the ratepayer in respect of the business on 11 March 2020. The Guidance said councils should ignore changes to the rating list after 11 March 2020, even if back-dated, unless it was factually clear on 11 March 2020 that the list was inaccurate. However, where the council had reason to believe the information it held about the ratepayer on 11 March 2020 was inaccurate it could withhold or recover the grant and take reasonable steps to identify the correct ratepayer. Small business grant
11. Businesses which, on 11 March 2020, received Small Business Rates Relief (SBRR) were able to apply for a payment of £10,000.
12. Eligibility for SBBR was subject to section 43 of the Local Government Finance Act 1988. This said the rate applied to occupied businesses.

Local Restrictions Support Grant and Restart grant

13. The Government announced further support for those businesses required to close during the second national lockdown from 5 November to 2 December 2020, and the third national lockdown from 5 January to 31 March 2021. Eligible businesses were those on the rating list prior to the start of each lockdown.
14. The Government provided additional support for business required to close to help them re-open safely (the restart grant). Eligible businesses were those which, according to the council’s records, were ratepayers on 1 April 2021.

Liability for business rates

15. The Local Government Finance Act 1988 (LGFA 1988) identifies three categories of ratepayer:
• occupiers
• owners, and
• persons named in central rating lists.
16. 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.
17. The case law on rates liability is highly technical. It is for a council to decide who is the correct liable ratepayer. However, the Ombudsman can consider if a council has followed a proper decision making process.

What happened

18. Mr X emailed the Council a copy of the lease for his business and a form to register for Small Business Rates Relief (SBRR) on 15 April 2020. The lease was dated and began on 6 March 2020. However, Mr X says the business had been trading for 10 years prior to this, arranging tickets for events.
19. Mr X said he heard nothing further. He sent the Council several letters by post, which the Council said it had not received. These letters were sent on 20 June, 20 August, 5 December and 26 December 2020. In the letters he asked for an update and said he considered the business was entitled to a grant of £25,000.
20. I have seen Mr X’s letter to the Council dated 20 June 2020, in which he said that despite sending documents by email in mid May and “numerous conversations”, he had not heard whether his application was agreed. He asked for an urgent update.
21. Mr X emailed the Council on 5 January 2021 requesting a copy bill. He said due to the lack of support the business was struggling to pay rent and wages. He said if the Council did not respond, he would complain to us, which he did on 18 January 2021. The Council provided a statement of the information on its records.
22. He emailed the Council again on 31 March 2021 accusing the Council of deliberately withholding Government funds. On 4 April 2021, Mr X emailed to ask when the Council would be paying the “restart grant as well as all the grants we’ve been chasing you [about] since March 2020”. He also referred to having a complaint at stage 3 of the complaints process.
23. The Council responded that it did not have a record of the business at the address given, nor any record of his complaints. It asked Mr X to provide further information so it could look into the matter. Mr X provided copies of the initial email and the letters he had sent by post.
24. The Council asked Mr X for utility bills and proof of rent paid from the start of the lease. On 19 June 2020 Mr X provided a receipt dated 27 February 2020 from the estate agent managing the property for rent paid for the period 1 March to 31 May 2020. He also provided a utility bill dated 8 April 2020 addressed to the company at the address given, showing telephone and broadband charges of £28.34, including VAT for the period 24 March to 30 April 2020, and showing one brief call made on 23 March 2020.
25. The Council said it did not consider the evidence provided was substantial enough to prove occupation. It asked Mr X to provide:
• Bank statements to show rent paid since the lease started;
• Gas/electricity statements for the property since occupation commenced;
• Information about the business and its operations from March 2021.
26. Mr X said he had provided the information the Council had requested initially and would now ask us to look into the case. The Council responded to explain that as Mr X was asking the Council to amend its records to show his business was the liable party back-dated to March 2020, it needed to prove the business was in occupation then and that it was still in occupation. It also needed confirmation about whether the property was currently occupied or empty. It said it needed the information requested to meet its audit requirements for COVID-19 grants.
27. Mr X declined to provide further information.
28. Council records indicate an officer reported in August 2021 the premises had been unoccupied for many months, apart from a short time when it was used for a political campaign.

My findings

29. Mr X initially contacted the Council in April 2020. He provided a copy of a lease that began on 6 March 2020 and a form to request SBRR. At that stage, the business premises were on the rating list but Mr X’s business was not on the Council’s record as the liable ratepayer. Mr X did not ask about COVID-19 business grants at that stage.
30. On receipt of that information from Mr X I would have expected the Council to ask for information to show the business was the correct ratepayer before amending its records. It is unclear why the Council did not do so. I acknowledge that it would have been dealing with a substantial number of grant enquiries and payments at that time and it is likely it was simply overlooked. However, the Council should have made enquiries as needed and decided whether to make Mr X’s business liable to pay rates and, if so, whether the premises were also entitled to SBRR. Its failure to do so was fault.
31. In the normal course of events, I would expect the Council to have identified the oversight on receipt if a chaser email from Mr X. Having not heard from the Council, Mr X sent it four letters, which he posted to the Council offices. The Council says all post is sent to its document control team and indexed but it has no record of receiving any of those letters. I cannot explain why the letters did not reach the Council but nor can I hold the Council responsible for not acting on letters it did not receive.
32. Mr X asked for a copy bill in early January 2021 and the Council provided information from its records.
33. Mr X did not contact the Council again until late March 2021. The Council then asked for evidence the business was occupying the premises at the relevant time. It was not satisfied the initial evidence provided was sufficient to show this and asked for further evidence.
34. I have seen the evidence Mr X provided. The utility bill does not show calls being made from the business premises, and the billing period did not start until 23 March, which was after the relevant date for grant purposes. The existence of a lease entitled the business to occupy the premises but does not, on its own, indicate the business was occupying them. Therefore, I do not consider it was fault for the Council to request the additional evidence it asked for in June 2021.
35. Mr X refused to provide the information requested. As a consequence, the Council did not record the business as the liable ratepayer for the premises nor award SBRR. This meant the business was not eligible for the small business grant, nor the LRSG nor the Restart grant, which were only available to ratepayers.

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Agreed action

36. The Council will, within one month of the date of the final decision, apologise to Mr X for not responding to his request to record his business as the ratepayer and his application for SBRR in April 2020.

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Final decision

37. I have completed my investigation. I have found fault, which caused a delay for which the Council will apologise.

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Investigator's decision on behalf of the Ombudsman