Summary: Mr X complained the Council wrongly refused COVID-19 business grants and gave him incorrect advice. The Council initially refused a Restart grant for an incorrect reason but this fault did not cause Mr X an injustice because it reconsidered the application when he challenged its original decision.

The complaint

1. Mr X complained the Council wrongly refused a COVID-19 Restart grant on the basis the business was a takeaway. He also complained the Council gave incorrect advice about applying for earlier COVID-19 business grants. He said this meant he missed out on grant support the business was entitled to.

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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 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)
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. We cannot investigate late complaints unless we decide there are good reasons. Late complaints are when someone takes more than 12 months to complain to us about something a council has done. (Local Government Act 1974, sections 26B and 34D, as amended)
6. In this case Mr X complained to us in August 2021. This was more than 12 months after the early COVID-19 grant schemes were administered. He explained he had not complained earlier because he accepted the Council’s advice that his business was not eligible. He was later told the advice was incorrect. In the circumstances, I exercised discretion to consider the period from March 2020.
7. 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

8. I considered the information Mr X and the Council provided, and relevant Government Guidance, as set out below.
9. Mr X and the Council had an opportunity to comment on my draft decision and I considered the comments received before making a final decision.

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What I found

COVID-19 business grants

10. 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).
11. Businesses which, on 11 March 2020, were eligible for Small Business Rates Relief (SBRR) were able to apply for a Small Business Grant (SBG) of £10,000.
12. Businesses which, on 11 March 2020, were eligible for the Expanded Retail Discount (ERD) could apply for a Retail, Hospitality and Leisure (RHL) grant of between £10,000 and £25,000. The amount of grant depended on the rateable value of the premises. Premises with a rateable value of over £51,000 were not eligible.
13. 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. In those cases a council 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.

Valuation Office Agency (VOA)

14. 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.

Local Restrictions Support Grants (LRSG)

15. The Government provided further funding to support businesses required to close or which were significantly affected by restrictions to prevent the spread of COVID-19 from August 2020, including two national lockdowns. To be eligible for those grants, the business had to be registered for business rates.

Restart grants

16. 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 between January and March 2021. To be eligible, the business must:
• be the liable ratepayer on 1 April 2021;
• be engaged in offering in-person services in the relevant sectors; and
• trading (engaged in business activity) on 1 April 2021.
17. Relevant to this complaint, the Guidance said a hospitality business could be defined as a business whose main function was to provide a venue for the consumption and sale of food and drink. It suggested councils use the following criteria to assess whether a business was eligible for a grant:
• Businesses offering in-person food and drink services to the general public.
• Businesses that provide food and/or drink to be consumed on the premises, including outdoors.
18. It said the definition of a hospitality retail business should exclude food kiosks and businesses whose main service is takeaway (not including businesses that adapted to offer takeaways during periods of restrictions).

What happened

19. Mr X has operated a food business within a larger business premises since September 2019. Mr X said there was a delay in registering the food business for business rates. The reason(s) for that delay is not clear.
20. The Valuation Office Agency (VOA) website shows his business premises were added to the rating list in March 2021, backdated to 2019. The Council confirmed it was not notified of the split of the business into a food business and larger business until late March 2021. It amended its records to show the food business as a separate premises within 3 days of receiving the VOA notification.

COVID-19 business grants (spring 2020)

21. Mr X applied for a COVID-19 business grant in April 2020. This was refused because the larger premises had a rateable value of more than £51k, which meant it was not eligible.
22. At that stage, the Council was not aware the business had been split and the premises for the food business was not on the ratings list on 11 March, (which was the relevant date for the Spring 2020 COVID-19 business grants). Government Guidance said councils should ignore changes to the rating list after 11 March 2020, even if backdated, unless it was factually clear to the council on 11 March 2020 that the rating list was inaccurate.
23. The Council confirmed Mr X did not make an application for its discretionary scheme in Spring 2020.

Restart grant

24. As mentioned, the VOA notified the Council that Mr X’s business premises were added to the rating list in late March 2021 and the Council set up a business rates account by the end of that month.
25. Mr X applied for a Restart grant on 27 April 2021. The Council initially refused the grant on 28 May 2021 on the grounds the business was not registered for business rates on 1 April 2021. The Council accepts this was incorrect as the business had since been registered.
26. When Mr X queried the refusal, it asked him for:
• confirmation of whether the business was open to the general public or just to guests within the larger premises;
• whether the business was primarily a dine-in restaurant or takeaway; and
• evidence of takings for January/February 2020 to show the breakdown between dine-in and takeaway sales.
27. Mr X provided further information on 8 June 2021. He explained the business provided food to guests within the larger premises and to the general public on both a dine-in and takeaway basis. He provided a breakdown of sales, which indicated that a significant proportion of sales was to the public on a takeaway basis. He explained the business had taken various steps to increase takeaway sales after travel restrictions meant that most services within the larger premises were cancelled.
28. The Council reconsidered its decision. It wrote to Mr X on 10 June 2021 to confirm its initial decision would stand because the figures Mr X provided showed that more than 50% of the sales were for takeaways. It said this decision was final.
29. On 18 August 2021, Mr X provided further information to the Council including details of an income stream in early 2020 that he had not previously provided,. He also provided more information about steps taken to increase takeaway sales during the pandemic.
30. The Council replied on 18 August 2021 that the grant scheme had closed and the funding had ended. It stated its previous decision was final but if Mr X considered it had not administered the scheme properly he could complain to us.

My findings

31. We are not an appeal body. Our role is to consider whether the Council followed a proper decision making process. If there was no fault in the process, I cannot comment on the decision reached.
32. The Council was not at fault for refusing a COVID-19 grant for the larger business in April 2020. Premises with a rateable value of more than £51,000 were not eligible for the main grants.
33. The Council was not aware the business had been split at that stage, but the food business would not have been eligible because it was not on the ratings list on 11 March 2020. The Council is not responsible for any delays by the VOA and there is no evidence it gave incorrect advice to Mr X.
34. Mr X did not apply for a discretionary grant, a Local Restrictions Support Grant (LRSG) nor an Additional Restrictions Grant (ARG).

Restart grant

35. The Council initially refused this grant on the grounds the business was not registered for business rates on 1 April 2021, which was one of the scheme criteria. The Council accepts it wrongly refused the grant initially, which was fault. However, this did not cause an injustice to Mr X as it reconsidered the application when he challenged its refusal.
36. Takeaways were expressly excluded from the Restart grant scheme, so it was appropriate for the Council to consider whether the business was primarily an eat-in business or a takeaway. Based on the evidence Mr X provided in June 2020, the Council decided it was primarily a takeaway and was therefore not eligible for a Restart grant. I have not found fault in the way it decided this.
37. Mr X provide further information two months after the Council issued its appeal decision. This included evidence of a further income stream. If this income was taken into account, the business was roughly 50% dine-in and 50% takeaway so the Council would still have had to make a judgement about how to categorise the business. Based on the figures seen, it would have been open for the Council to decide its original assessment was still correct.
38. In the event, the Council did not consider the application further, but I have not found fault with that for the following reasons:
• the onus was on Mr X to provide all the information and evidence the Council asked for, and the Council was entitled to make its decision based on the information he provided;
• I am satisfied it was not apparent to the Council when it made the appeal decision that some information was missing and therefore there was no requirement for it to ask Mr X for further evidence before making that decision; and
• the grant scheme had closed, and Government funding had been withdrawn by the time the additional information was provided.

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Final decision

39. I have completed my investigation. I found the Council was at fault for initially refusing the Restart grant for an incorrect reason but this did not cause Mr X an injustice.

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Investigator's decision on behalf of the Ombudsman