Summary: Mr X complained about the Council’s decision to reject his application for an Additional Restrictions Grant without giving him the opportunity to provide further evidence staff had returned to work from the Furlough scheme. There was no fault by the Council in its consideration of Mr X’s grant application.

The complaint

1. Mr X complained about the Council’s decision to reject his application for an Additional Restrictions Grant without giving him the opportunity to provide further evidence staff had returned to work from the Furlough scheme.
2. Mr X applied for an Additional Restrictions Grant top-up for a business he is a shareholder for. He said the company does not use payroll software, so he sent a word document containing employee details. Mr X is unhappy the Council rejected the application and did not contact him for more evidence. He said the company met the rest of the criteria, and the Council did not specify what evidence applicants needed. It only asked for evidence the company retained employees.
3. Mr X said the Council’s decision was a blow for the company, which has suffered financially due to the COVID-19 pandemic.

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The Ombudsman’s role and powers

4. We investigate complaints of injustice caused by ‘maladministration’ and ‘service failure’. I have used the word fault to refer to these. We consider whether there was fault in the way an organisation made its decision. If there was no fault in the decision making, we cannot question the outcome. (Local Government Act 1974, section 34(3), as amended)
5. 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”.
6. 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

7. I considered the complaint and the information Mr X provided.
8. I made written enquiries of the Council and considered its response along with relevant law and guidance.
9. Mr X and the Council had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.

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What I found

The Additional Restrictions Grant

10. The Additional Restrictions Grant (ARG) was a discretionary scheme introduced by Government on 31 October 2020 to support businesses affected by the COVID-19 pandemic. It was aimed at businesses who were not generally eligible for support under other grant schemes.
11. The Government later announced three top-ups to the ARG scheme, on 5 January 2021, 3 March 2021, and 21 December 2021.
12. The Government gave councils discretion to issue grants based on local needs. The Government also said businesses would need to confirm they met the eligibility criteria.

The Council’s Additional Restrictions Top Up Grants Policy 2021/22

13. The Council extended its ARG top up scheme in October 2021. For this version of its scheme, the Council targeted two categories of businesses:
• Category one was for businesses who had reintroduced staff to work from the Furlough scheme (within the last six months and continued to employ them on 1 October 2021).
• Category two was for businesses who had not previously received a COVID-19 related business support grant from the Council.
14. Eligible businesses under category one received a one-off grant of £10,000. The Council paid one-off grants of between £5,000 and £10,000 to eligible businesses under category two, depending on their circumstances, social value, and importance to the local economy.
15. The Council said its application form would gather all necessary information to satisfy the eligibility criteria. It also said all decisions were final, with no right of appeal.

What happened

16. Mr X applied to the ARG top up in November 2021.
17. The Council refused Mr X’s application on 8 November 2021 because he did not provide a payroll report for the October.
18. The Council’s ARG top up scheme closed on 10 November 2021.
19. Mr X complained. He said:
• The Council did not specify in what format companies should supply a payroll report or what the report should contain.
• His company runs a manual payroll system – they do not have software to produce it.
• He provided proof of employment for October and thought this would be enough, or, if not, the Council would ask for more information.
• The Council should keep his application open and specify what information it needs.
20. The Council told Mr X that, while it planned to run the ARG top up scheme until February 2022, it had used all available funds. It had therefore closed the scheme. The Council said it was not possible to process Mr X’s original application, because he did not give evidence the company reintroduced staff from Furlough.
21. The Council sent its stage one complaint response on 15 December 2022. It said it refused Mr X’s application for two reasons:
• Mr X’s payroll report from October 2021 was not in a valid format.
• The company letter confirming it retained employees was not in line with the necessary format of evidence.
22. The Council refused to consider Mr X’s complaint at stage two of the process. It said a typed document is not enough evidence the company retained staff and Mr X’s application failed the Council’s compliance checks. His application therefore did not meet the criteria for the grant.

My investigation

23. In response to my enquiries, the Council told me it needed to see evidence companies paid salaries to confirm employees were on the company payroll.
24. The Council said the evidence in this case was not enough because it only had staff names. There was no evidence of salaries. It would have accepted an electronic payroll report or a manual one if the company did not use payroll software. It would have accepted a screenshot of Mr X’s manual payroll report.
25. The Council said applicants had to declare they were uploading a payroll report before moving onto the next stage of the application. Applicants also had to tick a box to confirm they could meet the grant requirements before moving to the next stage.
26. The Council said it could have discussed evidence options if Mr X had contacted its grant team by email, as he had done before for other grant schemes. The Council said it refused Mr X’s application on 8 November, but the scheme did not close until 10 November, so he still had time to get in touch and then reapply.
27. The Council said it was not possible to go back to Mr X about his application due to the large number of applications received. The onus was on the applicant to apply, or reapply, with the correct evidence to satisfy the scheme.

Analysis

28. Mr X’s company does not use any payroll software, so he sent the Council a word document with employee details. The Council did not accept this as evidence staff had returned to work after Furlough.
29. Mr X is unhappy because the Council rejected the application without asking him for more evidence. He said the Council’s information about the grant application did not specify companies had to provide a payroll report. It only asked for evidence the company retained employees after Furlough. Mr X said the Council did not confirm what a payroll report should contain until it responded to his complaint.
30. The Council provided me with evidence of the prompts to applicants which it included on its online application form. One prompt asked applications for “Evidence of Furlough claim submitted from HMRC Portal – Names of the employees must be listed”. Then under required document types, it said “HMRC Agreements”.
31. Another prompt asked for a “Payroll report dated from October 2021 confirming the relevant employee has been retained from the Furlough Scheme”. Then under required document types, it stated “Proof of Employment”.
32. The Council did not provide extensive guidance on what a payroll report should look like, or on what specific evidence it may accept. However, the Council’s grant policy and application form makes clear there was criteria applicants had to show they met.
33. The Council decided Mr X’s evidence did not meet the criteria. The Council gave reasons for that decision, and I have not seen evidence of fault in its consideration.
34. I do not dismiss Mr X’s complaint, because I appreciate he expected the Council to contact him for more information. However, the Council said it received many applications. The fact the Council closed the scheme several months early because it used all the funds supports this. Also, as above, the Council did have a published policy with criteria, and it built prompts into its online application form. I therefore do not consider the Council was at fault for not reaching out to applicants individually about their evidence.
35. If Mr X was unsure whether the Council would accept his evidence, he could have contacted the Council for advice before sending his application. I understand he did contact the Council for advice about earlier grant schemes.

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Final decision

36. Subject to further comments by Mr X and the Council, I intend to complete my investigation. There was no fault by the Council in its consideration of Mr X’s grant application.

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Investigator's decision on behalf of the Ombudsman