Summary: Mr X complained the Council wrongly refused COVID-19 business grants, adding to the financial difficulties caused by the pandemic. The Council was not at fault.

The complaint

1. Mr X complained the Council:
• delayed in dealing with his application for a COVID-19 small business grant and wrongly refused to pay the grant; and
• wrongly refused to pay Local Restrictions Support Grants during the second and third national lockdowns.
2. Mr X said the delays meant he was put to additional time and trouble pursuing the matter and the lack of a grant payment added to the financial difficulties caused by the COVID-19 pandemic.

Back to top

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)

Back to top

How I considered this complaint

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

Back to top

What I found

Relevant law and guidance

COVID-19 Small Business Grant

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. Businesses which, on 11 March 2020, were eligible for Small Business Rates Relief (SBRR) were able to apply for a payment of £10,000.
11. Eligibility for SBBR was subject to section 43 of the Local Government Finance Act 1988. This said the rate applied to occupied businesses.
12. Grants were payable to the person recorded as the ratepayer in respect of the business on 11 March 2020. Where the council had reason to believe the information it held about the ratepayer on 11 March was inaccurate they could withhold or recover the grant and take reasonable steps to identify the correct ratepayer. The Guidance said councils should ignore changes to the rating list after 11 March 2020, even if back-dated, unless they were factually aware on that date the rating list was inaccurate.
13. The Guidance specifically excluded certain types of premises from accessing the grants, including car parks and car parking spaces. (Small Business Grant Fund and Retail, Hospitality and Leisure Grant Fund: Guidance for Local Authorities, March 2020, at paragraph 23)
14. Businesses were required to confirm they complied with the scheme conditions, for example, that they did not fall within the definition of an undertaking “in distress” on 31 December 2019. Businesses which as of 11 March 2020 were in liquidation or dissolved were not eligible for a grant.

Local Restrictions Support Grant (Closed) Addendum) (LRSG)

15. The Government provided support to businesses forced to close during the second national lockdown from 5 November to 2 December 2020. This was later extended to cover the third national lockdown from 5 January to 31 March 2021.
16. Eligible businesses were those required to close in line with Government restrictions. The Health Protection (Coronavirus, Restrictions) (England) (No. 4) Regulations 2020 sets out which businesses had to close by law. This included non-essential retail, leisure, personal care, sports facilities and hospitality businesses.

Restart grant

17. Support was provided to support specific types of business, including non essential retail businesses, to enable them to reopen safely after restrictions were lifted following the third national lockdown.
18. The Guidance set out the types of businesses that could be considered non-essential retail and specifically excluded some business types including vehicle repair services and storage facilities. However, those lists were not exhaustive and the Guidance said it was for councils to determine those cases where eligibility was unclear.

Additional Restrictions Grant (ARG)

19. The Government also provided discretionary funding for councils to support businesses that were required to close or had been severely impacted by the second national lockdown.
20. The Guidance, issued on 4 November 2020, said councils could decide how much funding to provide to businesses and which businesses to target. Councils could use the funding to support businesses that were important to its local economy.
21. The Guidance also said:

“In taking decisions on the appropriate level of grant, [councils] may want to take into account the level of fixed costs faced by a business in question, the number of employees, whether they are unable to trade online and the consequent scale of coronavirus losses”.

22. This Council’s discretionary scheme was decided in line with Government Guidance. To be eligible, the business must:
• Be trading in Kirklees;
• Have been open and trading as usual before the restrictions;
• Have been legally required to close or have been significantly impacted by local restrictions from 5 November 2020. Businesses not forced to close will be required to provide evidence demonstrating a significant impact on turnover/sales as a result of stricter social distancing being implemented;
• Be operating in one of more of the following sectors:
1. independent non-essential retail;
2. leisure;
3. hospitality;
4. visitor accommodation;
5. personal care and close contact services;
6. retail, hospitality. leisure supply chain;
7. entertainment and tourism (including events and supply chain businesses); and
8. community facilities/centres, including faith-based venues.

Valuation Office Agency (VOA)

23. The 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 rating list.

What happened

24. Mr X operates an accident claims and vehicle storage business.

Small Business Grant

25. Council records at 11 March 2020 did not show Mr X’s business as the liable ratepayer for the business premises. The Council said it had no knowledge on that date that its records relating to the premises or the ratepayer were incorrect.
26. Mr X telephoned the Council on 19 March asking it to amend its records.
27. On 18 May 2020, the VOA asked the Council to amend its records for the premises in which the business operated. This involved splitting various units within the commercial premises in which Mr X’s company operated. The change was back-dated to 2 January 2020.
28. On 18 June 2020, the Council sent Mr X a business rates bill. This showed his business as the liable ratepayer, back-dated to 2 January 2020, and showed small business rates relief was applied from the same date. Around the same time, Mr X applied for a small business grant (SBG).
29. At this stage, the rating list showed the premises for Mr X’s business consisted of parking spaces only. On 24 June 2020 it refused the grant on the basis the premises was a car park and therefore not eligible.
30. The Council also indicated the business may not be financially viable, which Mr X challenged. On 3 July, the Council confirmed it had refused the grant because the premises was a car park. It said it had checked the premises on the VOA website, which showed the premises consisted of car parking spaces with no office space. It said Government Guidance was clear that car parks and car parking spaces were not eligible for the SBG.
31. Mr X said he telephoned the Council on 8 and 21 July, and sent complaints on 5 August and 20 September 2020. He emailed on 2 October 2020 to complain about the Council’s failure to respond. The Council checked its records but could trace no telephone calls on those days and had no record of receiving complaint letters around the dates mentioned. It said the VOA had notified it on 16 September 2020 of a change in the rateable value of the premises and a change of description to an office and premises. It said its grant decision was made on the basis of the information it had at the time but it would now amend its records and review its grant decision.
32. On 23 October 2020 the Council said that, because the rating list had been changed from 2 January 2020, it needed evidence to show the business was trading and in occupation of the premises as at 11 March 2020. It said on receipt of that, the case would be considered by its reconsideration team.
33. Mr X provided a water bill, insurance document and a bank statement with details of the transactions redacted. The redactions meant the Council could not tell if the transactions were business-related and therefore it said it could not accept that as evidence of trading. Mr X said the Council should carry out a search on Companies House, which in his view, would provide sufficient evidence of trading.
34. Mr X sent two further emails in November and the Council sent him its final decision on 18 December 2020. It refused the grant on the basis Mr X had not provided sufficient evidence to show the business was trading and in occupation of the premises on 11 March 2020.

Local Restrictions Support Grant (LRSG)

35. Mr X applied for a further grant on 28 November 2020, during the second national lockdown. The Council refused to pay the grants on the grounds the business was not required to close. It said vehicle repair businesses and car parks were permitted to stay open and provided a link to Gov.UK so Mr X could check this.
36. Mr X challenged the decision. He explained the nature of the business required face to face contact with customers, which could not happen during the lockdown. The Council reconsidered its decision and wrote to Mr X with its decision on 26 February 2021. It upheld its original decision, which was that the business was not eligible for the LRSG because the Government had not required the business to close. It said if the business was severely impacted by the COVID-19 pandemic, it may be eligible for a discretionary grant. It would ask the relevant team to consider that using the information from the LRSG application.
37. On 10 April 2021, Mr X asked the Council why he had not heard anything about Restart grants. The Council replied on 15 April 2021 to say the business was not forced to close as a result of Government restrictions. This meant Mr X was also not eligible for a Restart grant to assist businesses forced to close when they reopened after the third national lockdown.
38. On 22 April, the Council said it had received a letter from Mr X’s solicitor but had nothing further to add. It said his application was initially refused, based on Government criteria, because the business was not forced to close during the lockdowns. The decision was reconsidered by a separate team, which agreed with the initial decision. It wrote to Mr X to advise him of this and suggested he apply for its discretionary scheme.

Discretionary grant

39. The Council considered whether Mr X’s business met the criteria for a grant under its ARG discretionary scheme. It refused the grant on 16 March 2021 because the business did not operate in one of the eligible sectors.

My findings

40. We are not an appeal body. It is not my role to say whether the Council’s decisions were correct nor to substitute my own judgement for that of the Council. It there was no fault in the decision-making process, I cannot comment on the decisions reached.

Small Business Grant

41. The Council did not record Mr X’s business as the liable ratepayer on 11 March 2020. However, it amended its records in June 2020 and sent Mr X a business rates bill to confirm this.
42. Also in June it refused the grant because the premises consisted of car parking spaces, which were specifically excluded from the grant scheme. It was not at fault for doing so because this was based on information it held at the time.
43. In September 2020, the VOA notified the Council of a further change to the rating list, including a change to the description to office and premises. The Guidance for the grant scheme said councils should ignore changes to the rating list after 11 March 2020, even if back-dated, unless the council was aware of a factual inaccuracy on 11 March 2020. This meant the Council was entitled to ignore the change. It did not need to review its original decision.
44. The Council did review its decision. It asked Mr X to provide evidence the business was occupying the office space as at 11 March 2020. The Council considered the evidence Mr X provided but was not satisfied the evidence was sufficient to show the business was in occupation on the relevant date. There was no fault in the way it considered this. This meant the business was not eligible for the grant because the scheme required the business to be occupying eligible premises on 11 March 2020.

Local Restrictions Support Grant

45. Government Guidance said eligible businesses were those forced to close by law during the second and third national lockdown. Mr X’s business was not one that was on the list of businesses forced to close. The Council had no discretion about this. Its decision to refuse this grant was in line with Government Guidance and there was no fault in the way it considered the application.

Restart grant

46. This scheme was for businesses that had been closed to help them reopen safely. The Council refused the grant because the business was not forced to close. Although not stated by the Council, the business was also similar to businesses expressly excluded from the scheme. The Council was not at fault for refusing the Restart grant.

Additional Restrictions Grant

47. The Council also considered whether the business was eligible for a discretionary grant. It refused the grant because the business was not operating in the one of the eligible sectors. This decision was made in line with its published scheme.
48. The Government gave councils wide discretion in designing their discretionary schemes to meet the needs of the local economy. I have seen the decision-making record and there is no evidence of fault in the way the Council decided its scheme.

Delay/Failure to respond

49. Whilst there was some delay in dealing with these grant applications and responding to emails, this was not sufficient to amount to fault, taking into account the considerable workload in relation to COVID-19 grant schemes

Back to top

Final decision

50. I have completed my investigation. I have not found fault.

Back to top

Investigator's decision on behalf of the Ombudsman