Summary: Mr X complained that Council delays meant he missed out on a COVID-19 business grant. The Council was at fault for delays in dealing with the business rates registration, for which it has apologised. The Council has also paid a sum equivalent to the grant Mr X missed out on, which provides an appropriate remedy for the injustice caused by the delay.

The complaint

1. Mr X complained the Council delayed in registering his business for business rates, which meant he was too late to apply for a Retail, Hospitality and Leisure grant in 2020. Although the Council later paid a discretionary grant for the equivalent amount, he believes he was entitled to a discretionary grant as well. As a result, the business may have missed out on grant funds.

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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 an organisation’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 an organisation’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 considered:
• the information Mr X and his representative provided;
• the information the Council provided in response to our enquiries;
• relevant Government guidance and Council policies; and
• our guidance on remedies, available on our website.
7. Mr X and the Council had an opportunity to comment on my draft decision and I considered their comments before making a final decision.

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What I found

Background

8. In response to the COVID-19 pandemic the Government introduced two grant schemes to support businesses in March 2020. The Department for Business, Energy and Industrial Strategy published guidance for councils on how to apply these: “Grant Funding Schemes” (March 2020).
9. Businesses which, on 11 March 2020, were eligible for the Expanded Retail Discount (ERD) may be eligible for a Retail Hospitality and Leisure (RHL) grant of between £10,000 and £25,000. Councils adopted their own scheme for ERD, having regard to Government Guidance issued in April 2020. Of relevance to this complaint, the Guidance said properties that were wholly or mainly used as shops would benefit.
10. Grants were payable to the person recorded as the ratepayer in respect of the business on 11 March 2020. Where the council had reason to believe the information it held about the ratepayer on 11 March was inaccurate, they could withhold or recover the grant and take reasonable steps to identify the correct ratepayer.
11. The RHL grant scheme closed to new applications on 30 September 2020.

Local Restrictions Support Grants (LRSG)

12. The Government introduced a number of schemes to support businesses affected by restrictions to prevent the spread of COVID-19 from August 2020 onwards.
13. The LRSG (Open) scheme applied from 1 August to 5 November 2020 for businesses that remained open but were severely impacted by “high” and “very high” local restrictions.
14. The LRSG (Closed) scheme provided grants for businesses severely impacted as a result of the highest band of local restrictions from 8 September to 5 November 2020 and from 2 December 2020 to 5 January 2021).
15. The LRSG (Closed) (Addendum) scheme provided support for businesses forced to close during the second national lockdown (5 November to 2 December 2020) and the third national lockdown (5 January to 31 March 2021).

Additional Restrictions Grant (ARG)

16. The Government also provided funding to councils to provide discretionary grants to businesses that were not eligible for LRSG schemes. Councils had wide discretion to devise their own scheme to meet the needs of their local economy but were encouraged to prioritise businesses that remained closed or were severely impacted by COVID-19 restrictions.
17. This Council’s scheme had three phases. In all three phases, suppliers to businesses in the retail, hospitality, events and leisure sectors, if they either paid business rates or had commercial property costs, were eligible to apply, as were businesses legally required to close that did not pay business rates but had commercial property costs. Applicants had to provide evidence of hardship.
18. The decision record for the Council’s scheme shows it agreed to use £60k of the ARG discretionary funds to make payments to a small number of businesses that had missed out on grants from other schemes due to processing delays.

Restart grants

19. Support was provided for retail and hospitality businesses to help them to reopen safely after the third national lockdown. To be eligible the business had to be:
• the liable ratepayer on 1 April 2021;
• engaged in offering in-person services in the relevant sectors; and
• trading (engaged in business activity) on 1 April 2021.
20. The scheme Guidance set out certain types of business that were eligible and specified some types that were not eligible. However, those lists were not exhaustive and the Guidance said it was for councils to determine those cases where eligibility was unclear.

What happened

21. Mr X occupied his business premises from 5 March 2020. He said he told the Council he was occupying the premises and asked about business rates but did not receive a reply. Mr X has not been able to confirm the dates he contacted the Council or provide any evidence that he did this. The Council said it had no record of any contact until 2 July 2020 when Mr Y contacted it, on behalf of Mr X.
22. The Council did not respond to Mr Y so he emailed again on 27 July 2020 and on 26 August 2020. On 27 October 2020, the Council sent Mr Y a form to complete. Mr Y returned a completed form on 20 November 2020, and provided a copy of the lease, electricity bills from March 2020, and bank statements to confirm the rent paid. On 24 November, the Council confirmed it had set up a business rates account for Mr X with effect from 5 March 2020, although it noted the previous tenant had said they did not vacate the premises until April 2020. It issued business rates bills for 2019-2020 and 2020-2021, which it sent by post.
23. On 25 November, Mr Y provided a letter from the landlord that confirmed the previous tenant had vacated the premises on 20 February 2020 and Mr X had occupied the premises from 5 March 2020. Mr Y said this meant Mr X was eligible for “the initial grant”.
24. There was further correspondence about the initial grant. The Council said Mr X had not asked about the grant until November 2020. Mr Y said Mr X had applied for the grant in May 2020 and was entitled to the payment. He said Mr X should not lose out if the Council had paid the grant to the previous tenant in error. In those circumstances, he considered the Council should recover the grant paid in error and pay it to Mr X. The Council said it could not pay the RHL grant because the scheme had closed on 30 September 2020.
25. In the meantime, in late March 2021, Mr X applied for a LRSG. On the application form, he stated he was providing an in-person service prior to 4 November 2020 but the business was then closed due to national lockdowns and local restrictions. The Council asked for further information about the nature of the business. Mr Y explained that Mr X ran two businesses; one provided services to other retailers in part of the premises, and the other was a seasonal business that imported and sold fruit based in another distinct part of the premises.
26. The Council refused the application for an LRSG on the basis that the main business was not reliant on an in-person service and was not required to close. The food business was also not required to close. It said there was no right of appeal.
27. Mr Y complained, on behalf of Mr X, in June 2021. He said:
• Mr X had told the Council he was occupying the premises;
• Mr Y had contacted the Council in July 2020;
• Council delays meant Mr X did not have a business rates account number and therefore he could not apply for a grant.
28. The Council responded in September 2021. It accepted there was a delay in asking Mr X to provide additional information needed to set up the business rates account. However, it said information about grant schemes was available on its website throughout and Mr X had not either made an application or asked it about grants until November 2020.
29. Mr Y was unhappy with the response and asked the Council to consider the complaint at stage 2 of its process. The Council responded in November 2021. It said:
• Mr X occupied the premises form 5 March but did not tell the Council about this until 2 July 2020;
• it accepted there was a delay between 2 July and 27 October 2020 in asking for further information, for which it apologised;
• the relevant team would consider whether to pay the grant from one of its discretionary schemes but Mr X would need to complete an application form for that.
30. Mr X completed an application form. The Council considered the application and agreed to pay £25,000, which was the amount it would have paid under the RHL scheme if an application had been processed in time. It paid this in December 2021.
31. In response to my enquiries, the Council said Mr X had not made an application for a grant from its ARG hardship scheme. To be eligible for a grant from that scheme, businesses had to provide evidence they had suffered hardship as a result of COVID-19 restrictions. Therefore, the Council could not say whether the business would have been eligible for a further grant if Mr X had applied for one.

My findings

32. Although Mr X occupied the business premises from 5 March 2020, I have seen no evidence asked the Council to register him as the liable ratepayer before 2 July 2020.
33. The Council accepts it delayed in dealing with the registration between 2 July and 27 October 2020. Although I note the business rates team will have been very busy in that period due to the additional workload created by the COVID-19 grant schemes, this was a significant delay, which was fault.
34. By the time the Council set up the business rates account, the RHL scheme had closed. At stage 2 of its complaint process, the Council recognised that its delay contributed to Mr X missing the chance to apply for the RHL grant. To remedy this injustice, it paid an equivalent sum from its discretionary scheme.
35. The Council has apologised for the delay and has paid a sum equivalent to the maximum grant Mr X could have received from the RHL scheme. Therefore no further recommendations are needed in respect of this issue.
36. Mr X did not make an application to the ARG hardship scheme so did not receive any further discretionary payments. Information about the scheme was available on the Council’s website throughout the time the scheme was open, and Mr X had the assistance of Mr Y, a finance professional, to make an application if he wished to do so. I find there was no fault by the Council that led to Mr X missing out on funding from this scheme.
37. The Council refused the LRSG, which was in line with the Guidance. Mr X did not complain about the refusal so there was no requirement for the Council to explain further how it reached its decision.

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Final decision

38. I have completed my investigation. I have found fault leading to personal injustice. This had already been remedied by the Council and no further recommendations were needed.

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Investigator's decision on behalf of the Ombudsman