Summary: Mr X complained the Council wrongly refused his sporting club a COVID-19 grant on the basis that it is a members-only club and so not reasonably accessible to visiting members of the public. Mr X says this has caused financial hardship. The Council failed to give clear and consistent reasons for refusal and failed to seek information about the accessibility of the club. The Council will invite the club to submit evidence to show it is reasonably accessible to visiting members of the public and will reconsider eligibility for the grant.

The complaint

1. Mr X complains the Council wrongly refused his sporting club a COVID-19 grant on the basis that it is a members-only club and so not reasonably accessible to visiting members of the public.
2. Mr X says this decision has caused financial hardship.

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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. 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. As part of the investigation, I have:
• considered the complaint and the documents provided by the complainant;
• made enquiries of the Council and considered the comments and documents the Council provided;
• discussed the issues with the complainant;
• sent my draft decision to both the Council and the complainant and taken account of their comments in reaching my final decision.

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What I found

The Small Business Grant Fund

7. In March 2020, in response to the COVID-19 pandemic, the government created schemes for councils to pay grants to small businesses. These included the Small Business Grant Fund (SBG).
8. To receive funding from the SBG a business had to be in receipt of small business rate relief (SBRR) (or rural rates relief) on 11 March 2020. Eligible businesses would receive a grant of £10,000.

Retail, Hospitality and Leisure Grants

9. In March 2020, in response to the COVID-19 pandemic, the government created schemes for councils to pay grants to small businesses. Relevant to this complaint it created Retail, Hospitality and Leisure grants (RHLG) targeted at those sectors.
10. To receive funding from the RHLG fund a business had to be in receipt of the Expanded Retail Discount.

Expanded Retail Discount

11. In April 2020 the Government published guidance for councils on how to apply the Expanded Retail Discount (ERD) 2020/21.
12. This was available to occupied businesses that were mainly used for retail, hospitality or leisure.
13. The ERD was available for sports and leisure facilities providing services to visiting members of the public.

Key facts

14. Mr X is the Chairperson of a members-only amateur sporting club. It leases an area of outdoor space from the Council for its exclusive use. In April the club emailed the Council asking if it would qualify for the SBG or RHLG as a business rate payer. The club completed an application form and submitted it to the Council.
15. The Council responded on 2 May 2020 saying the club did not meet the qualifying criteria. It said “your facility does not appear on the list of charitable organisations that the Government has provided in order to be eligible to receive a grant."
16. The club treasurer, Ms Z, contacted the Council again in March 2021. She said that the eligibility criteria required businesses to be paying business rates and to be a leisure business. Ms Z said the club met this criteria as it was a non-profit making members-only club and is registered as a “community amateur sports club (CASC)”. It asked for a full explanation as to why it was not eligible as it was aware of similar clubs that had been awarded the grant.
17. The Council wrote to the club on 24 May 2021. It said the application made in April 2020 was rejected on the grounds it was a members-only club. It said the Government had stipulated that in order to qualify for the grants the facility had to be open to members of the public and so on that basis being a members-only club meant it did not meet the criteria.
18. Ms Z contacted the Council again saying she had reviewed the eligibility criteria and could find no reference to the additional conditions it had now imposed. She asked the Council to explain why these unofficial conditions had been taken into account.
19. On 7 June 2021 the Council explained it was acting as an agent for the Government in distributing the COVID-19 business grants and the Council did not impose any unofficial conditions. It explained there were two grant streams running in April 2020: the Small Business Grant Fund and the Retail, Hospitality and Leisure Grant Fund.
20. It said to qualify for the SBG the business had to be receiving small business rate relief and as the club received CASC charitable relief, it did not qualify for this grant.
21. It went to explain that for the RHLG the club had to be receiving the expanded retail discount in 2020/21. It said for leisure facilities to qualify for the ERD it must be used for the provision of sport or leisure to visiting members of the public. It said the scheme specifically excluded premises that were not reasonably accessible to visiting members of the public. The Council said that based on this guidance, the application was rejected on the grounds it was a members-only club.
22. Mr X wrote to the Council on 2 August asking for a reconsideration of the decision to refuse the grant. Mr X said he had studied the list of grants produced by the Council and he considered that some of these clubs were not registered charities but held the same status as his club.
23. On 5 August the Council wrote again to Mr X. It said it had contacted the Department for Business, Energy and Industrial Strategy which confirmed there is no specific appeals process for the business grant schemes. It said the decision on grant eligibility is down to the Council and its interpretation of the guidance. It said the Council’s Chief Executive had been fully briefed and had not reached a different conclusion. It said that on this basis it would treat the correspondence as completion of both stage one and two of its complaints procedure and it had nothing further to add.

Analysis

24. This complaint is about the Council’s failure to pay the club a COVID-19 business grant, specifically the SBG or RHLG. Based on the information I have seen, I am satisfied the Council was entitled to decide the club was not eligible for the SBG because it was not in receipt of small business rate relief or rural rate relief. So I find no fault in the Council’s decision not to pay that grant.
25. The Council originally told the club it was not eligible for the RHLG because the facility did not appear on the list of charitable organisations that the Government provided in order to be eligible to receive a grant. It later said it had refused the grant because the club was for members only and the scheme specifically excluded premises not reasonably accessible to visiting members of the public.
26. The Council has therefore not been clear and consistent regarding the reasons for refusing the grant. The Council is correct to state that the ERD criteria specifically excludes premises that are not reasonably accessible to visiting members of the public. The reasons given by the Council indicate it decided the premises were not reasonably accessible because it is a members-only club. I am not persuaded the guidance makes any such correlation or that the grant cannot be paid to members-only clubs. The failure to give clear and consistent reasons based on the published guidance is fault.
27. In response to my enquiries about this complaint, the Council provided evidence gathered when an officer visited the club. The officer provides a description of their journey to the site and notes a lack of signage, limited vehicle accessibility and a perimeter fence with barbed wire to prevent access. The Council also provided information from the club’s website saying this did not give any details about its location or opening times. However, I note the site visit was not carried out until 22 January 2022 and so this information was not considered by the Council when reaching its decision to refuse the grant or when reviewing this decision.
28. The Council says there was not time to contact all individual businesses to seek clarification when making the initial decision on grant entitlement. It said that it would carry out further research on an individual basis if the business challenged the decision. It said the club did not challenge the decision until 10 months after the initial refusal and by this time the scheme was closed. It said that if the club had provided evidence it was open to the public, the decision would have been reassessed.
29. I consider the Council’s failure to seek information about accessibility at the time of the decision and the review is fault. Because of the confusion around the reasons for refusing the grant and the emphasis on it being a members-only club, I cannot see why the club would think it needed to provide evidence that it was reasonably accessible to visiting members of the public.
30. Mr X has been put to avoidable time and trouble in pursuing this matter as well as not being confident the correct decision has been made and that his club has not missed out on a grant it was entitled to.

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Agreed action

31. To remedy the injustice to Mr X as a result of the fault in this case the Council should, within one month, take the following action:

• Invite Mr X to submit information to support his view the club is reasonably accessible to visiting members of the public and then review its decision on eligibility for the RHLG. If the Council is satisfied the club was eligible, it should make a payment equivalent to the amount of grant that would have been awarded; and

• Pay the club £150 to recognise Mr X’s frustration and time and trouble in pursuing this matter.

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Final decision

32. I have completed my investigation with a finding of fault for the reasons explained in this statement. The Council has agreed to implement the actions I have recommended. These appropriately remedy any injustice caused by fault.

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Investigator's decision on behalf of the Ombudsman