Summary: There was no fault in how the Council considered an application for business rates relief under the expanded retail discount scheme. Although the complainant disagrees with the Council’s view, the Council was entitled to make the decision it did, and we have no grounds to criticise it. We have therefore completed our investigation.

The complaint

1. I will refer to the complainant as Mr M. Mr M complains on behalf of his business, and is represented in his complaint by his solicitor, Mr F.
2. Mr F complains the Council has refused to apply business rates relief to a site previously operated by Mr M’s business, under the expanded retail discount (ERD) scheme.

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The Ombudsman’s role and powers

3. We investigate complaints of injustice caused by ‘maladministration’ and ‘service failure’. I have used the word ‘fault’ to refer to these. 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. 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

5. I reviewed the correspondence between Mr M, Mr F and the Council.
6. I also shared a draft copy of this decision with each party for their comments.

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What I found

7. Mr M is the director of a business which rents out and sells used vehicles. In early 2020, because of capacity issues at its main site, the business rented out another site nearby. Mr M has explained the intention was to use this site to “show” vehicles to prospective customers, and eventually develop it into a sales premises.
8. However, due to the impact of the COVID-19 pandemic, the business was unable to properly occupy the site. Mr M says that, although it eventually sold some vehicles from the site once the first lockdown restrictions began to ease in mid-2020, with the advent of the second full lockdown in early 2021, it became clear the business’s plan for the site would not work. It therefore ended its tenancy in February 2021.
9. Given the site’s function, Mr M considered it was eligible for business rates relief under the ERD scheme. However, the Council has refused this application, because it was not satisfied the business was using the site ‘wholly or mainly’ for retail, as required to be eligible for the ERD scheme.
10. There has been a very significant volume of correspondence between Mr M (and later, Mr F) and the Council about this matter. For the sake of practicality I will not detail this correspondence here, but rather will set a summary of the Council’s reasons for refusing the ERD application. The Council explained these in a letter on 18 May 2021:

• photos of the site supplied by Mr M show a ‘To Let’ sign in the name of the landlord;
• other photos of the site on the internet show the offices to be entirely empty;
• the photos show activity in the car park of the site, but there are no internal photos;
• the Council sent letters to the site in October and November 2020 which were returned undelivered by Royal Mail, because the addressee had ‘gone away’;
• there was no signage in the business’s name of any description on the site, not even a poster in the windows;
• sales invoices supplied by Mr M mention the site, but the phone number provided is for a different site;
• there is no evidence at all on the internet of the site being advertised as a sales facility;
• Mr M’s own emails to the Council in May 2020 said the business had rented the site to store vehicles when not rented out. The Council therefore considered the site's purpose was ‘storage’, not retail, which meant it was not eligible for the ERD scheme;
• the business’s rental agreement for the site prohibited it from displaying any kind of advertisement, signage, nameplate or similar branding; and
• the person Mr M said he had employed to work at the site had, by his own admission, not transferred there before the first COVID-19 lockdown began.

11. The Council obtained a liability order for unpaid business rates for the site. Mr M applied the magistrates’ court for the order to be set aside, on the basis the business should have been granted ERD, but the court explained it had no jurisdiction to consider this.
12. After completing the Council’s complaints process, where it maintained its view on the ERD matter, Mr F referred Mr M’s complaint to the Ombudsman in October 2021.

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Legislative background

Expanded retail discount

13. 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.
14. At paragraph 10, the guidance said:

“Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:

1. as shops, restaurants, cafes, drinking establishments, cinemas and live music venues,
2. for assembly and leisure; or
3. as hotels, guest & boarding premises and self-catering accommodation.”
1. Paragraph 11 of the guidance clarified each type of business must be open “to visiting members of the public” to qualify.
2. And 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.”

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Analysis

17. Mr M and Mr F argue the Council should have applied the ERD to the business’s second site, because it was used for retail. The Council considers the evidence does not support this – its view is that the site was not in use for retail to visiting members of the public, as required for it be eligible for the ERD scheme. It has therefore refused to grant the ERD, and is pursuing the business for the unpaid business rates from the site during the period of its occupation.
18. The Ombudsman’s role is to review how councils have made their decisions. We may criticise a council if, for example, it has not followed an appropriate procedure, failed to take into account relevant information, or not properly explained why it has made a decision. However, we cannot make operational or policy decisions on councils’ behalf. We do not provide a route of appeal against contested decisions, and we cannot direct the council to disregard its own professional judgement simply because someone disagrees with it.
19. In this case, the Council has considered the evidence provided by Mr M, and given a clear and detailed explanation why it does not accept the site was eligible for the ERD. This is a decision the Council was entitled to make.
20. This is not to say I dismiss Mr M’s view, but this, alone, does not give me grounds to uphold his complaint. The Council’s refusal to accept Mr M’s view is not evidence of administrative fault – it is simply a disagreement on the facts of the case. It is not the Ombudsman’s role to adjudicate in this dispute; we cannot decide which party is correct, nor direct one party to accept the other’s view. This being the case, there is nothing further the Ombudsman could achieve here, and so I will end my investigation at this point.

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Final decision

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

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Investigator's decision on behalf of the Ombudsman