Summary: Mr X complained the Council gave him incorrect advice resulting in his missing out on financial support for his business. We have found no evidence of fault by the Council.

The complaint

1. Mr X complains the Council gave him incorrect advice regarding eligibility for business grants resulting in his missing out on financial support from October 2020 to April 2021.

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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. 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 Mr X and I reviewed documents provided by Mr X and the Council.
7. I gave Mr X and the Council an opportunity to comment on my draft decision. I considered any comments before making a final decision.

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What I found

Liability for business rates

8. The Local Government Finance Act 1988 (LGFA 1988) identifies three categories of ratepayer:
• occupiers
• owners, and
• persons named in central rating lists.
9. 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.
10. 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.

Grant schemes

11. The Government introduced various grant schemes to support businesses affected by the COVID-19 pandemic. These had varying eligibility criteria and closing dates. However, in each case the council was to make payment to the recorded ratepayer.
12. Local Restrictions Support Grants (“LRSG”) provided support to businesses affected from October 2020. There were various LRSG schemes but they all had a closing date of 31 March 2021 except one. The LRSG covering the period 16 February to 31 March 2021 had a closing date of 31 May 2021. However, payment was to the person recorded as ratepayer on 5 January 2021.
13. The Additional Restrictions Grant (“ARG”) provided support for business affected from November 2020. Councils could set up their own schemes and so open and close dates were subject to Council policy. The Council’s first ARG scheme closed in January 2021. Its later scheme opened on 4 March 2021 and closed on 6 March 2021.
14. The Closed Business Lockdown Payment provided support for businesses affected from 5 January 2021 and closed to new applications on 31 March 2021.
15. The Restart grant provided support from 1 April and closed to new applications on 30 June 2021. However, a business had to be trading on 1 April 2021 to be eligible.

What happened

16. Mr Y ran a restaurant at Address A and the Council recorded him as ratepayer.
17. On 2 August 2020 Mr X and others paid a deposit to buy the restaurant at Address A from Mr Y, subject to exchange of the lease.
18. The Council says on 17 November Mr X told the Council he occupied Address A. The Council says it asked for a copy of the lease and other documents to evidence occupation. There is nothing to suggest Mr X provided this evidence to the Council before April 2021.
19. On 5 March 2021 Mr X spoke to the Council regarding his occupation at Address A and the Council sent him a moving in form.
20. On 20 April 2021 Mr Y transferred the lease to Mr X and others. Mr X then completed the moving in form, notifying the Council that company X had moved into Address A and paid rent from 20 April 2021.
21. On 27 April Mr X wrote to the Council. In summary he said:
• The Council told him he could not apply for any grant until he took over the lease at Address A. However, he now declared that company X took over responsibility for the restaurant at Address A from 3 August 2020 and could provide evidence in support.
• Mr Y gave him the restaurant to run from 3 August 2020, however it was not possible to complete the paperwork to transfer the lease until 20 April 2021.
• On 5 March he explained his circumstances to the Council and asked if he could apply for the grants but under Mr Y’s name. The Council said this was not possible and would amount to fraud.
• Mr X says he also asked if he could claim retrospectively and the Council agreed he could. He therefore now wanted to claim all financial support that would have been available to company X from 3 August 2020.
22. On 28 April the Council told Mr X:
• The moving in form and tenancy documents showed the tenancy began on 20 April 2021. If that was the case there were no grants he could apply for as this was outside the eligibility period for all current grant schemes.
• To action the moving in form it needed clarity as he named company X on the moving in form but individuals were named on the tenancy documents.
• There was nothing preventing the previous ratepayer applying for grants.
23. On the same day Mr X addressed the Council’s queries around the lease. He said he did not apply for a grant earlier as the Council had said it would be fraudulent to apply during the change in ownership. He said the previous ratepayer did not apply for a grant either, in light of this.
24. The Council told Mr X that company X was not named on the lease as required to establish rates liability. Mr X then asked the Council to proceed using the names recorded on the lease.
25. The Council then recorded Mr X and others as ratepayers effective from 20 April 2021.
26. On 8 June Mr X sent the Council evidence to show company X had traded from Address A since August 2020.
27. On 11 June the Council amended its records to show Mr X and others as the liable ratepayer from 20 October 2020. I do not have a record of its decision making, but this is not relevant to the complaint.
28. On 15 June Mr X complained to the Council. In summary he said:
• He took over the restaurant in August 2020 but completing the lease took longer than expected.
• On 5 March he asked the Council if he could apply in Mr Y’s name. The Council said this would be fraud but that he could apply when he took over the lease and the grants would be backdated.
• He received the lease on 20 April and completed the moving in form. The Council then recorded him as ratepayer from 20 April however he had to be ratepayer from 1 April to receive any grant.
• After further exchange with the Council he provided further evidence and it amended the move in date to 20 October 2020.
• He complained as the Council gave incorrect advice on 5 March. He now believes he could have applied then in Mr Y’s name. Further the Council was wrong to say it would apply grants retrospectively.
• He now wanted the Council to pay all grants available from 20 October.
29. The Council said:
• During the call on 5 March he asked if he could apply for a grant in Mr Y’s name. However, he could not apply for a grant as he was not the liable ratepayer. And, for him to apply in the name of the previous ratepayer would be fraudulent. Therefore, it gave the correct information.
• At the time of the call it did not have any authority to discuss the account of Mr Y with him. As with any other ratepayer, Mr Y could have applied for a grant in his own right if he wished.
• It received conflicting information on occupancy and only after further evidence updated the liabilty from October 2020.
• It could not consider grant applications received after the deadlines set by the Government.
• Once it updated the occupancy period to October it had told Mr X he could apply for the Restart grant as this was the only grant still available.
30. Mr X complained further. He insisted the Council said on 5 March that the previous ratepayer could not apply and grants could be backdated.
31. The Council responded that the previous ratepayer should not have applied if he knew that ultimately he was not the liable ratepayer at the relevant times. It repeated that it could not backdate any grant, as the deadlines had lapsed.
32. Mr X escalated his complaint.
33. The Council further explained:
• At the point of Mr X’s contact and establishing the correct date of liability all schemes, except the Restart Grants scheme, were closed. Therefore, no new applications could be made. This was a central Government decision.
• It had told him to apply for the Restart grant and it had received this application.
• It no longer held the recording of the call in March to confirm the exact details of the conversation. However, as the correct liability had not yet been established, it would have been appropriate for the Council to give adequate warning of the outcomes of the wrong ratepayer making an incorrect grant application.
• In March neither Mr X nor the previous ratepayer would have been eligible to make an application for any of the grants, because it had not established the correct liability and as the grants had been closed.
34. Mr X again wrote to the Council explaining his circumstances. He said on 29 April the Council told him the previous ratepayer should apply for any grant. This contradicted the Council’s recent response, that no-one could have applied on 5 March. He had acted in good faith upon information provided by the Council. If the Council had correctly told him on 5 March that the previous ratepayer should apply for any grants, then “they would have received the grants they were entitled to”. He therefore again asked the Council to pay the grants he would have been entitled to had he applied earlier.
35. The Council explained grants were payable to the ratepayer trading on a set date. For new ratepayers, it required a leaseholder agreement as evidence to support paying a grant to the ratepayer trading on a set date. In November 2020 he told the Council he had occupied Address A since August 2020. It asked him for evidence of this, including a copy of a lease in his name. At that time the Government had not set a closing date for the grant schemes. However, he did not provide the lease until 20 April 2021, after the closing dates.
36. Upon evidence of the lease it made him liable from 20 April 2021. Upon further evidence provided in June 2021 it made him liable from 20 October 2020. It did not receive any of this evidence before the grant schemes closed and so it could not have recorded him as ratepayer or paid him any grant. One grant scheme covered the period 16 February to 31 March and closed on 31 May 2021. However, it did not have evidence he was liable for rates over that period until June, after the closing date.
37. It agreed its response of 30 June that the previous ratepayer could not apply differed to its later advice that they could apply. However, this was because the officer replying on 30 June was unaware the previous ratepayer remained closely involved with the business.
38. Mr X asked to escalate his complaint further. The Council replied repeating previous information and said he could contact the Ombudsman.
39. In comments on a draft of this decision Mr X said:
• On 5 March he asked the Council if Mr Y could apply for a grant and the Council incorrectly said “no”; Y then relied on this advice;
• He would have applied for a grant earlier if the Council had given the correct information;
• The Council said it could backdate any grant at a time when it did not know the scheme closure date; however it should honour this;
• He queries why the Council said Mr Y could not apply and then said Mr Y could apply.

Findings

40. We expect councils to reach decisions based on relevant law and guidance, and taking into account relevant information available at the time.
41. The Council says Mr X first asked to be recorded as ratepayer in November 2020 and it asked for evidence of occupation to update its records. The Council is entitled to ask for such information to decide on liability for rates.
42. Mr X did not provide evidence of occupation until 20 April 2021. The Council considered this and decided Mr X was the liable ratepayer from 20 April 2021. It informed Mr X and gave reasons for its decision. It also told him he was not eligible for any grant. I find no fault in the Council’s decision making process. The Government had closed most grant schemes by then and those that remained open applied to those recorded as ratepayer on 1 April 2021 or earlier, which Mr X was not.
43. In June the Council considered Mr X’s further evidence and found he was the liable ratepayer from 20 October 2020. This meant he could apply for a Restart grant. The Council refused to accept any other grant application from Mr X as the remaining schemes had closed. This decision was in line with the Government’s guidance and I therefore cannot find fault. While Mr X considers the Council should have allowed late applications and/or backdated the grant, the Council was not obliged to do so and there is a lack of evidence that it had otherwise agreed to do this.
44. There are no contemporaneous records of Mr X’s call with the Council on 5 March 2021. However, both Mr X and the Council gave accounts of the call in later correspondence. I attach some weight to these as they were made not long after the call took place and are relatively consistent. However, I am also mindful that miscommunications may occur and recollections may be inaccurate. On review, I note:
• If the Council told Mr X he could not apply for a grant in the name of someone else, that would be correct.
• It is not clear what the Council may have meant if it told Mr X he could apply for grants retrospectively. However, if Mr X provided a lease evidencing occupation at an earlier date before the grant schemes closed, the Council would have considered grants applicable from that earlier date.
• There is a lack of evidence the Council suggested Mr X could apply for grants after any relevant closing date.
• If the Council told Mr X that Mr Y could not apply, any fault did not cause injustice to Mr X.
45. I therefore find no evidence of fault causing injustice to Mr X.
46. If a previous ratepayer felt they missed out on a grant, they would need to complain themselves to the Council and then to the Ombudsman if necessary.

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Final decision

47. I have completed my investigation. I find no evidence of fault by the Council in the advice it gave Mr X or on how it decided on Mr X’s requests for a grant.

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Investigator's decision on behalf of the Ombudsman