Summary: We have discontinued our investigation about the Council’s decision to refuse the complainant’s business rates relief under the expanded retail discount scheme, and a grant under the retail, hospitality and leisure scheme, because his complaint is late. There was no fault in the Council’s decision the business is not eligible for partial rates relief.

The complaint

1. I will refer to the complainant as Mr D.
2. Mr D complains the Council refused his business’s application for rates relief under the expanded retail discount scheme, and its application for a COVID-19 support grant under the retail, hospitality and leisure scheme.
3. Mr D also complains the Council took too long to make a decision on the business’s application, which meant it was unable to apply for partial rates relief under section 44A of the Local Government Finance Act 1998.

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The Ombudsman’s role and powers

4. We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word ‘fault’ to refer to these. 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)
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. 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 a council followed the relevant legislation, guidance and our published “Good Administrative Practice during the response to COVID-19”.

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How I considered this complaint

7. I reviewed Mr D’s correspondence with the Council.
8. I also shared a draft copy of this decision with each party for their comments.

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What I found

9. There has been a very significant volume of correspondence between Mr D and the Council in relation to this complaint. In the interests of simplicity, I will describe only the key facts here.
10. Mr D’s business occupied a premises in 2019. The Council granted a three-month empty property exemption for business rates, which expired in January 2020. The business then paid the remaining rates for tax year 2019/20 in February and March.
11. In April, after the Government imposed lockdown restrictions on the UK, Mr D applied for rates relief under the expanded retail discount (ERD) scheme, and for a retail, hospitality and leisure (RHL) support grant.
12. After an extended discussion with the Council, in August it refused both of the business’s applications. The Council did not accept it had been using the premises “wholly or mainly” for a qualifying purpose for the ERD, as the scheme required; and this meant the business also did not qualify for the RHL grant, because it was only open to businesses which had been given the ERD.
13. Mr D continued to discuss the matter with the Council into 2021. He also applied for s44A rates relief for the period April to August 2020. The Council refused this because it could not be paid retrospectively, and also explained the business was not eligible for the relief anyway.
14. In October 2021, Mr D made a complaint to the Ombudsman.

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Legislative background

Expanded retail discount

15. In March 2020, the Government announced that all retail businesses would receive 100% relief from business rates for the tax year 2020/21. In April, it then published guidance for councils on how to apply this relief.
16. At paragraph 14, the guidance said:

“To qualify for the relief the hereditament should be wholly or mainly being used for the above qualifying purposes. In a similar way to other reliefs (such as charity relief), this is a test on use rather than occupation. Therefore, hereditaments which are occupied but not wholly or mainly used for the qualifying purpose will not qualify for the relief.”

Retail, hospitality and leisure grants

17. In March 2020, the government created schemes for councils to pay grants to small businesses and retail, hospitality and leisure businesses. This was because the COVID-19 restrictions affected so many of them.
18. A business’ right to a grant depends on its rateable value on the business rating list and its eligibility for certain business rate reliefs on 11 March 2020. Government guidance states later changes to the rating list, even if they are backdated to 11 March 2020, do not entitle a business to a grant. A council can make an exception if, on 11 March 2020, it already had good reason to believe the rating list was inaccurate for a particular address or business.

Section 44A of the Local Government Finance Act 1998

19. Councils can provide partial relief from business rates, where a business is temporarily not in occupation of a full premises. This is a discretionary relief, meaning it is for councils to decide whether or not to grant it.
20. S44A relief can only be applied at the time an application is made. It cannot be granted retrospectively.

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Analysis

21. Mr D complains the Council has refused his business’s applications for the ERD and RHL grant scheme; and that, in delaying its decision on the ERD, prevented the business from applying for s44A relief at the applicable time.
22. The law says a person should approach the Ombudsman within 12 months of becoming aware of the substantive issue they wish to complain about.
23. In this case, the Council refused both the ERD and RHL applications in August 2020. However, Mr D did not complain to the Ombudsman until October 2021, approximately 14 months later. This means his complaint is late.
24. We have discretion to accept late complaints, where we consider a person has good reason for their delay in approaching us. But Mr D has provided no explanation for his delay; and I note he continued to pursue his complaint with the Council after its decision date, up to the point he referred it to the Ombudsman in October 2021. For this reason, I am not persuaded there is any good reason for his delay in approaching us, and so I will not exercise discretion to accept his complaint out of time.
25. With respect to Mr D’s complaint about s44A relief, it is not entirely clear to me when he first brought this up with the Council, and nor is it clear whether he actually made a formal s44A application at any point. But I can see the Council told him conclusively the business did not qualify for this relief, and declined to engage in further correspondence about it, in September 2021. I therefore consider this element of Mr D’s complaint to be in time.
26. The Council initially explained to Mr D it could not entertain an application for s44A relief because he was attempting to apply retrospectively. Mr D said this was because the Council waited until August 2020 to refuse his ERD application, by which point the business had vacated the premises entirely. He therefore blamed the Council for the fact he could not apply for s44A at the relevant time.
27. Subsequently, the Council provided a different explanation for its refusal of s44A relief. This was because the reason for Mr D’s business not being in full occupation of the premises was because of the impact of COVID-19, which was not a qualifying reason.
28. Mr D has questioned this. He points out that one of the example situations the Council gave, for when it might grant S44A relief, was where a premises could not be fully occupied due to “fire, flood or other disaster”. Mr D said the COVID-19 pandemic could clearly be described as a disaster.
29. I acknowledge Mr D’s point here. However, the Government issued guidance to councils about administering the ERD scheme, which said:

“For the avoidance of doubt, hereditaments which have closed temporarily due to the government’s advice on COVID19 should be treated as occupied for the purposes of this relief.”

30. I note the Council also quoted this in its correspondence with Mr D.
31. Although the Government guidance refers specifically to the ERD scheme, rather than s44A relief, I consider the point remains valid – if a premises had closed because of COVID-19 lockdown restrictions, this did not make it ‘unoccupied’ for business rates purposes. In turn, this means the business would not be eligible for the normal ‘unoccupied’ or ‘partially occupied’ rates reliefs, such as s44A.
32. I am therefore satisfied Mr D’s business could not have qualified for s44A relief, regardless of when he applied for it, and so any delay by the Council in deciding his ERD application was inconsequential. I will say it would have been better if the Council had explained this to Mr D originally, rather than saying he was too late to apply for s44A relief, but I do not consider this a significant point in isolation.
33. I therefore find no fault here.

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Final decision

34. I have completed my investigation with a finding of no fault.

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Investigator's decision on behalf of the Ombudsman