Summary: We will not investigate this complaint that Mr X was negatively impacted by incorrect information the Council gave to him about business rates. This is because we cannot directly link the injustice claimed by Mr X to Council fault and we cannot achieve the outcome Mr X seeks.

The complaint

1. Mr X complains he has been impacted financially after he acted on information the Council told him that his business would be eligible for full small business rate relief. Mr X says the Council retracted this and as a result he is liable to pay business rates in perpetuity when his initial business plan would have resulted in him paying much less. Mr X wants the Council to allow him an exemption from paying business rates for a year in recognition of this.

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The Ombudsman’s role and powers

2. The Local Government Act 1974 sets out our powers but also imposes restrictions on what we can investigate.
3. The Ombudsman investigates complaints about ‘maladministration’ and ‘service failure’, which we call ‘fault’. We must also consider whether any fault has had an adverse impact on the person making the complaint, which we call ‘injustice’. We provide a free service, but must use public money carefully. We do not start or may decide not to continue with an investigation if we decide any fault has not caused injustice to the person who complained, or we cannot achieve the outcome someone wants (Local Government Act 1974, section 24A(6))

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How I considered this complaint

4. I considered information provided by the complainant and the Council.
5. I considered the Ombudsman’s Assessment Code.

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Background and my assessment

6. Mr X took over a new business premises with the intention of splitting it into two units with his business operating in one unit and a charitable organisation in the other. Mr X was of the view that by doing this, his business would be eligible for full small business rate relief, meaning he would have no business rates to pay, and the charity would be eligible for an 80% discount on business rates.
7. Mr X contacted the Council about his new premises and says it told him during a telephone call, that his business would be eligible for full relief i.e. that no business rates would be due if it occupied the full unit. Mr X says because he was told this, he changed his plans. Mr X decided against splitting the premises into two and moved his business in, to occupy the full unit.
8. Mr X points out that following the telephone call, in emails between himself and the Council, he referred to what he had been told over the telephone about his business being eligible for full relief and that the Council did not contradict this. A few weeks later, the Council sent a summons to Mr X for non-payment of business rates relating to the new premises.
9. The summons was later withdrawn but the liability remained the same. Mr X considers that had he acted on his initial plans to split the unit he would not be in the position he is now. Mr X says it would be disruptive and have financial implications to split the unit now and considers that the Council should stand by its advice to him and at the least, allow him to pay no rates for a period of a year.
10. I have seen the Council’s notes of its telephone conversations with Mr X (there were no recordings) and these do appear to indicate that full business rates relief was mentioned during one of the calls. However, I do not consider it was valid for Mr X to act on this information alone or because the Council did not contradict statements he made about this in its responses to emails he sent to it or that his claimed injustice can be said to arise from any Council fault in this regard, for the following reasons.
11. It was incumbent upon Mr X as a business owner to satisfy himself about the suitability of the new premises before taking on the lease for it, including, in my view, its rateable value and therefore what business rates it would attract. Had Mr X done this, I consider he would have known or at least had doubts about the veracity of what he says he was told by the Council, several months after he had signed the lease. In addition, notwithstanding what was said in the telephone call in question or not said in subsequent emails, at around the same time, the Council sent Mr X a bill and a reminder for the business rates due on the premises, so indicating there was not a nil balance. I consider that both these factors ought to have prompted Mr X to seek further clarification before finalising his plans for the new premises.
12. It is also not clear that Mr X’s initial plans would have worked out as he says and the injustice he claims is also therefore, at best, speculative. Evidence the Council has provided to me indicates that Mr X had discussed his plans to split the unit with the Council previously, in the year prior to him taking on the new lease. The Council at that time advised Mr X to contact the Valuation Office Agency (VOA) explaining it was that body that would assess any changes to the premises and set any new rates accordingly. Mr X has provided no evidence of having done this.
13. For these reasons, we will not investigate, and we cannot achieve the outcome Mr X seeks

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Final decision

14. We will not investigate Mr X’s complaint because it is not clear that any council fault directly caused the injustice Mr X claims and we cannot achieve the outcome Mr X seeks.

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Investigator's decision on behalf of the Ombudsman