Summary: Mrs C complained the Council made a series of mistakes when it processed an application she made for her business to receive an Additional Restrictions Grant in January 2022. We upheld the complaint finding the Council sent a series of inadequate and inaccurate messages to Mrs C before closing her application. We found that but for the fault in those communications, the application may have succeeded. The Council has accepted these findings and agreed recommendations to remedy this injustice, set out at the end of this statement. The Council has also agreed to take action to identify others similarly affected by the mistakes identified in this case.

The complaint

1. I have called the complainant ‘Mrs C’. She complained the Council made a series of mistakes when it processed an application she made for her business to receive an Additional Restrictions Grant (ARG) in January 2022. In particular, Mrs C complained the Council:

• did not give clear information about what she needed to provide to receive a grant;
• delayed in deciding her application;
• wrongly refused the grant because her business was not trading in 2019;
• did not carry out a satisfactory investigation into her complaint.

2. Mrs C said as a result her business lost out on financial support when it needed it, because of the impact of COVID-19. Mrs C also said the Council’s approach towards her caused distress that negatively impacted on her mental health.

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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 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)
4. 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)
5. We may investigate matters coming to our attention during an investigation, if we consider that a member of the public who has not complained may have suffered an injustice as a result. (Local Government Act 1974, section 26D and 34E, as amended)
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. Before issuing this decision statement I considered:

• Mrs C’s written complaint to the Ombudsman and any supporting information she provided;
• correspondence between Mrs C and the Council about the matters covered by this complaint, which pre-dated this investigation;
• information provided by the Council in reply to my enquiries;
• Government guidance and local Council policy relevant to the ARG scheme;
• guidance from this office including on good administrative practice and our approach to remedying complaints.

8. I gave Mrs C and the Council opportunity to comment on a draft version of this decision statement. I considered any comments they made before completing my investigation and issuing this final version of the decision statement.

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What I found

Background – the ARG scheme

9. 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. Local authorities administered the scheme.
10. The Government later announced three further rounds of funding to top-up the ARG scheme – in January, March and December 2021. This complaint concerns the last of these funding rounds, for which applications opened in January 2022.
11. Government guidance explained the grant funding was to support businesses impacted by the Omicron variant which emerged in Autumn 2021. It listed various business sectors as eligible to apply including those offering personal services such as hair and beauty.
12. The guidance said: “previous guidance for the Additional Restrictions Grant indicated that businesses must have been trading before relevant restrictions were introduced in order to be eligible. This is no longer the case. All businesses that are trading and meet other eligibility criteria may apply to receive funding under this scheme. There is no starting date from which businesses must have been trading in order to qualify for grant funding”.

The Council’s scheme

13. The Council provided a copy of its West Northamptonshire Council ARG (Discretionary) Fund Policy, which covered awards made under the ARG scheme after April 2021 (when the Council came into existence). The policy did not exclude businesses which began trading after 2019 from applying to the scheme. The Council confirmed this position in reply to my enquiries.
14. The policy said the Council would decide applications within 10 working days.
15. The policy also said that: “a statement will be required from the company showing that at least 30% of normally expected revenue has been lost during the period”. Under evidence requirements, it said that “open business […] will need to provide evidence to demonstrate [..] a substantial impact on their income. This will be in the form of a bank statement showing business name, registered address and income details for the past three months along with comparative bank statements covering the same period for the financial year 2019/2020 (pre-Covid 19)”.
16. The policy said there was no right of appeal to a decision to refuse a grant award.
17. Around January 2022 the Council also added information to its website regarding AFG applications. Mrs C has provided a screen-print. This included the statement that: “bank statements will be required showing at least 30 per cent of normally expected revenue has been lost since 1 August 2021. Please provide bank statements and any other evidence showing a loss of 30 per cent or more for the period August 2021 to present day and the same comparative period for 2019 pre-restrictions. If your business was not trading in August 2019, please provide evidence of cancelled orders and bookings to show the loss of 30 per cent or more”.
18. The Council made ARG awards of £15,000 to successful applicants from the December 2021 funding round, where those businesses used premises with a rateable value of less than £15,000.

Principles of good administrative practice

19. In 2018 we published a guidance document setting out the standards we expect from bodies in jurisdiction called “Principles of Good Administrative Practice”. This included the principle of “acting fairly and proportionately”. We said this included “dealing with people and issues objectively and consistently”. Good practice meant “explaining clearly the rationale for decisions and recording them” and having “clear and accessible appeal routes”.
20. The guidance also included the principle of “putting things right”. We said local authorities should:
• recognise mistakes and apologise where appropriate;
• put mistakes right quickly and effectively;
• provide clear and timely information on how and when to appeal or complain; and
• operate an effective complaint procedure, which includes offering a fair and appropriate remedy when a complaint is upheld.
21. In May 2020 we issued an addendum in response to the COVID-19 pandemic; “Good Administrative Practice during the response to Covid-19”. Although we recognised councils were working under pressure, we still expected similar standards. We said decision reasons should remain clear, evidence based and where necessary explained in the particular context and circumstances of that decision.

Chronology of key events

22. Mrs C is a partner in a personal services business that operates out of retail premises in the Council’s area. The premises have a rateable value of less than £15,000. Mrs C and her business partner founded the business in August 2020.
23. Mrs C applied to the Council for money from the final round of AFG funding in mid-January 2022. With her application she provided proof of ID, bank statements, company accounts, utility bills and details of the rate account.
24. Around a week after application the Council said it needed more information, including copies of bank statements for the period August to November 2021. The message also said: “if your business was not trading in August 2019 please provide evidence of cancelled orders and bookings to show the loss of 30 per cent or more”.
25. Around a week later Mrs C sent bank statements as suggested. She also attached a list of cancelled bookings for December 2021.
26. In early March 2022 the Council asked for bank statements for the period August to December 2019. It asked for the information the following day.
27. Mrs C replied the next day advising the business did not trade in 2019. She received another message the same day from the Council again asking for bank statements from 2019. Mrs C replied the same day, in the same terms.
28. On 10 March 2022 Mrs C then received a message saying: “if you have no evidence to cancellations or evidence of revenue for 2019 your application will be denied”.
29. Mrs C replied the same day, saying she did not understand. She explained again her business did not trade in 2019. Mrs C also reminded the Council she had sent it evidence of cancelled bookings for December 2021.
30. The next day the Council replied. Its officer acknowledged having evidence of cancelled bookings for December 2021. They said: “but when I mean by cancellation to justify your supporting evidence it still needs to cover the grant criteria from 2019 v 2021. If your business began in 2020 then your application is non-applicable”.
31. On 15 March 2022, Mrs C contacted the Council again saying she did not understand. She believed her business was eligible to claim from the scheme. Mrs C also highlighted again the evidence of cancelled bookings in December 2021, running around 50%. Mrs C also said the business suffered cancelled bookings in October and November 2021.
32. The Council replied the same day. Its response said: “it’s a discretionary policy, there is no right of appeal and the Council’s decision is final. You would need to look into grants for businesses to see if you are applicable before you applied, it clearly stated what you needed before applying for this grant application. I am sorry but if you cannot provided or was not trading in 2019 your application is denied".
33. Mrs C again contacted the Council the same day. This time she enclosed a screenshot of the application criteria suggesting her business could apply even though not trading in 2019. To which she received a single line reply saying “sorry to decline your application, you was notified the grant criteria before applying”.
34. On 21 March 2022 Mrs C went on to complain. She explained her understanding the Council could not refuse her business an AFG because it was not trading in 2019. Mrs C also said she had provided evidence showing a 50% cancellation rate in bookings for December 2021.
35. The Council sent a reply on 29 March 2022. Its reply identified the overall income to Mrs C’s business from August to December 2021. It said cancellations from December 2021 were less than 30% of the total income of the business in this time. So, the business did not qualify for an ARG. The reply offered an apology that Mrs C did not receive this explanation sooner.
36. The ARG scheme closed at the end of March 2022. Mrs C continued her complaint and received a final reply from the Council in May 2022. It said that it did not consider it should review her complaint at Stage 2 of its complaint procedure as this would not achieve a different outcome. The Council said the ARG scheme had now expired and there was no right to appeal a refused award.

My findings

37. I begin my analysis by considering information published by the Council in support of the ARG scheme that businesses could refer to when applying for funds. I find this did not exclude businesses which began trading after 2019.
38. The policy referred to what evidence those businesses needed to provide to qualify for payment. It said they needed to show a 30% loss of revenue. But it did not define “the period” to which this loss applied. While the section on supporting evidence only provided information for businesses trading in 2019.
39. However, I recognise the Council added information to its website to support businesses applying for the December 2021 ARG funding round. This was clearer in saying that businesses needed to show a loss of normally expected revenue from 1 August 2021. But it was still potentially confusing for those businesses which not trading in 2019. The webpage clearly referred to the need they provide bank statements from August 2021, as it said these were ‘required’. It also said the business needed to provide evidence of cancelled orders and bookings. Yet, it did not confirm what period this evidence needed to cover.
40. I consider a business could imply that it should provide evidence of lost revenue from 1 August 2021. But on a literal reading the Council could have been asking for some evidence of cancelled orders and bookings to show the impact of the ongoing pandemic on business bookings. As it did not say it ‘required’ evidence to cover any particular date period after 1 August.
41. That said, I do not consider any vagueness in the Council’s policy was decisive to the success of failure of Mrs C’s claim. Because on four separate occasions – first in January and then three times in March 2022 - Council officers contacted her about her application.
42. For Mrs C’s application to succeed the Council needed her to provide satisfactory evidence of a 30% (or more) loss of revenue for 1 August to 31 December 2021. But the Council never asked Mrs C for that information. When it asked for evidence of ‘cancelled orders and bookings showing a 30% loss’ it did not explain over what period of time. I consider the failure to ask Mrs C to provide the evidence required was fault.
43. A second fault was the Council’s delay in deciding Mrs C’s application. There was a five-week gap between Mrs C submitting further information in January 2022 and the Council reviewing the claim in March 2022.
44. A third fault was the Council then repeatedly told Mrs C her claim could not succeed because she was not trading in 2019. It repeated this three times in a series of messages littered with grammatical mistakes and jumbled syntax.
45. Mrs C repeatedly pointed out the Council’s position was contrary to its policy. This included after it closed the claim. A fourth fault then followed in how the Council responded to her expression of dissatisfaction. Its reply was cursory and tried to shut down her correspondence.
46. This fault pointed to a wider problem with the Council’s administration of the ARG grant scheme in how it dealt with expressions of dissatisfaction with decisions. It is right for the Council to point out the Government gave it wide discretion over the terms of its ARG scheme and that it did not set up an appeals process.
47. However, it is one of the fundamental principles of good administrative practice that councils must be open to the idea that a decision maker can get something wrong. So, the Council should, as a minimum, have been offering access either to a review of its decision, or access to its complaints procedure to all those dissatisfied with a grant decision. These routes of redress are more important in circumstances where a decision does not carry any statutory or formal right of appeal.
48. Yet none of these flaws need have been fatal to Mrs C’s application. Despite the Council’s attempts to close down her correspondence, she made a complaint. The Council answered this in March 2022 before the ARG scheme closed. This correctly identified a flaw in the Council’s handling of her application. It recognised the Council should not have rejected Mrs C’s application based on her business being founded after 2019. For the first time, the Council also tried to calculate Mrs C’s loss of revenue for the period August to December 2021.
49. But it must have been obvious to the decision maker they did not have all relevant information to come to a clear view on this. They only had details of Mrs C’s cancellations for one month, December 2021. There was still time to ask Mrs C about previous months’ cancellations, as the Council’s officers should have done in the weeks previously, before the scheme closed. The complaint response therefore failed to offer the suitable redress still available, which was to re-determine Mrs C’s claim with the benefit of more information. This was the fifth fault in the Council’s handling of Mrs C’s claim.
50. I consider these faults caused Mrs C injustice. Combined, they meant she did have opportunity to provide all information needed by the Council to determine her claim. I accept Mrs C could have inferred from the Council’s website all the information she needed to provide. But I cannot give more weight to that than the opportunities the Council had to ask for information, given the multiple exchanges Mrs C had with its officers.
51. In addition, I consider those communications with officers caused Mrs C unnecessary frustration and distress.

Wider implications

52. During the investigation I asked the Council about other businesses potentially affected by the faults found in this case. In particular, I had a concern the Council may have wrongly excluded from the January 2022 ARG funding round businesses not trading in 2019. Also, that businesses did not have access to a review of a decision to refuse a grant.
53. My concerns here increased when the Council told me that it did not, because of resource constraints, have any quality checking measures in place when deciding grant applications. In Mrs C’s case it was the same officer who refused her application and rejected her representations challenging that decision. I have no reason to assume this was not the case for others also.
54. The Council told me that it refused 79 grant applications for businesses which failed to provide evidence of a 30% reduction in revenue. However, it does not know if any of these were from businesses founded after 2019, wrongly excluded from the scheme on that basis.
55. I am satisfied however there is still enough reason to believe others would be affected by the faults outlined above in this case. Because these went to the heart of at least one officer’s understanding of business’ eligibility to the scheme and how the Council dealt with expressions of dissatisfaction with decisions.
56. In addition to seeking a remedy for Mrs C’s injustice I therefore also recommended action the Council should take to consider other businesses potentially impacted.
57. I am pleased the Council has accepted all my findings set out above and agreed to take the action detailed below.

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Agreed action

Personal remedy

58. To remedy Mrs C’s injustice the Council has agreed that within 20 working days of a decision on this complaint, it will:
1. provide her with a written apology in line with the Ombudsman’s guidance on remedies: Guidance on remedies - Local Government and Social Care Ombudsman
2. pay her £250 in recognition of her frustration and distress;
3. invite her to provide information about the loss in revenue her business experienced between August and November 2021 and allow her 20 working days to provide this. If on receipt the Council finds Mrs C’s business suffered a loss of revenue of 30% or more between August to December 2021, then it will make a payment to her business of £15,000 (i.e. equivalent to the value of the ARG it would have awarded had her application been successful in March 2022).

Remedy for others

59. Within three months of a decision on this complaint, the Council has agreed to review the 79 decisions it made refusing support from the January 2022 ARG funding round for businesses which were “unable or failed to provide evidence of a loss of 30% income”. The review will be as follows:
1. First, it will check if any were refused assistance because they were not trading in 2019. If it identifies such cases, it will review the decision it took based on the evidence it held at the time and decide if:
1. it should instead have paid a grant or
2. it should instead have requested further information to decide the application.
2. Second, it will check all cases where it received an expression of dissatisfaction from a business refused a grant, where they gave reasons for disagreement with the decision. It will check if the business received a reasoned response to their representations and / or signposting to the Council’s complaint procedure. If it identifies cases where it provided neither, it will decide if:
1. those representations identified any flaw in the decision reached on the grant application; and
2. whether but for that flaw, the application would have been paid or
3. may have been paid subject to further checks.
3. All businesses identified that meet the tests above will be contacted to establish if they are still trading. If they are, then:
1. any who should have received a grant payment will be offered a payment equivalent to the amount they would have received;
2. any who may have received a grant had further enquiries been made (i.e. those referred to in points 59 a) 2) and 59 b) 3)) will be invited to provide such further information as the Council should have requested in 2022. The Council will allow no more than 20 working days for its receipt. On receipt, the Council will offer a payment equivalent to the grant those businesses would have received, if it is now satisfied it would have made a payment had it made those enquiries at the time.
60. The Council will provide us with evidence it has complied with the above actions.

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Final decision

61. For reasons set out above I upheld this complaint finding fault by the Council caused injustice to Mrs C and others. The Council has agreed a series of actions that I consider will remedy that injustice. Consequently, I have completed my investigation satisfied with its response.

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Investigator's decision on behalf of the Ombudsman