London Borough of Hounslow (17 019 801)

Category : Environment and regulation > Licensing

Decision : Upheld

Decision date : 23 Oct 2018

The Ombudsman's final decision:

Summary: The Ombudsman found fault by the Council on Miss N’s complaint that it fettered its discretion when it refused to refund her street trading licence fee which she surrendered after only 2 days. While the Council’s policy does not provide for refunds in any circumstances, the law gives it discretion to make refunds in whole or in part. It also failed to provide evidence to support what it said happened. The Council remedied the injustice caused by agreeing to apologise to Miss N, refunding part of the fee less administration costs, and by reviewing its policy

The complaint

  1. Miss N complains the Council fettered its discretion when it refused to refund all or part of the £426.80 fee she paid for a street trading licence which she had for only 2 days: as a result, she suffered financially.

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The Ombudsman’s role and powers

  1. 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)
  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)

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How I considered this complaint

  1. I considered all the information Miss N provided, the notes I made of our telephone conversation, and the Council’s response to my enquiries, a copy of which I sent her. I sent a copy of my draft decision to Miss N and the Council. I considered their responses.

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What I found

  1. Miss N found a site on which she could trade. She contacted the Council and completed a street trading licence application in September 2017. Street trading involves selling goods in the street and usually is done only in areas of the highway adopted for that purpose. Anyone wishing to use the public highway to sell goods or services, must have a street trading licence to do so from a designated pitch. She sent a fee of £426.80 as she wanted to trade for 6 months.
  2. The Council issued her with a temporary licence. When she began trading, she claimed she was harassed by the existing burger van trader operating without a licence on site. She claimed the Council told her before she applied that the trader had no licence and officers would take enforcement action.
  3. Miss N found the owner’s behaviour intimidating. As she traded alone, she decided to tell the Council she no longer wished to use the site. She asked for the return of her fee. She traded from the site for 2 days. The Council refused saying it was not policy to make refunds. As a gesture of goodwill, it offered her £100.
  4. In response to my enquiries, the Council confirmed it sends applicants for a licence an application form, the fee list, and a copy of the licensing policy. The Council failed to provide evidence showing this is what it did with Miss N.
  5. The policy, a copy of which I have seen, stated, ‘There will be no refund of licence fees should a licence for any reason become revoked or surrendered’ (paragraph 6.3, Street Trading Policy).
  6. The Council confirmed it was aware of the other trader on site. It provided no evidence to show when it became aware. It claimed officers made 3 site visits and issued the trader with a Fixed Penalty Notice. The trader was removed from the site. Again, the Council failed to provide evidence in support of these claims.
  7. The Council claimed Miss N called and spoke to an officer when she said she wanted to surrender the licence. It quoted the note as saying she: referred to lots of yellow lines outside with few walk-in customers; told him she had taken a risk to see what potential it had; and apart from harassment from the other trader, the site was more isolated than she realised. The Council failed to provide a copy of the record of this call.
  8. The Council maintained it had no power to give her a refund. In response to my enquiries about exercising discretion, it accepted refunds were discretionary. It went on to state its policy makes it clear refunds are not allowed. When members of the Council approved the policy, it was more likely they decided they did not wish to exercise their discretion which the law allowed them to do.

Analysis

  1. Trading in many London authorities is governed by Part 3 of the London Local Authorities Act 1990 (as amended). The Act allows the Council to grant temporary street trading licences (section 31).
  2. The 1990 Act provides where a licence is surrendered, the local authority,

‘may remit or refund, as they consider appropriate, the whole or a part-

  1. Of any fee paid for the grant or renewal of the licence;’ (section 32 (12))
  1. What the Council is claiming, without providing evidence members considered this issue, is that it was ‘more likely’ members decided they did not wish to exercise their discretion about refunds when they approved the Street Trading Policy.
  2. Even if this was correct, I satisfied the Council fettered its discretion. By having a blanket refusal, the Council cannot consider the individual merits of an applicant’s reasons for asking for a refund.
  3. I found the following fault by the Council:
      1. It failed to provide evidence in support of the claims it made in its response; and
      2. Its Street Trading Policy fetters the discretion given by the London Local Authorities Act 1990 (as amended) to consider making refunds in whole or in part.
  4. I consider Miss N suffered an avoidable injustice as she lost the opportunity to have the Council properly consider her request for a refund.

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Agreed action

  1. I considered our guidance on remedies.
  2. The Council will carry out the following action within 4 weeks of the final decision on this complaint:
      1. While I note the apology it sent her in response to my draft decision, the Council will in addition write to her and clarify that it is apologising for its failure to consider exercising discretion on her request for a refund;
      2. As the Council agreed to carry out a of review paragraph 6.3 of its Street Trading Policy, it will use its best endeavors to start this process without delay and complete the process by the end of September 2019. This takes account of both the statutory and internal timescale requirements for this process.
  3. In response to recommendations in my draft decision, the Council did the following:
  • Offered her a refund of £313.34. The Council explained licence fees are made up of costs for i) the processing and considering of the application (£110) and ii) the enforcement of the licence for its duration. It deducted a proportion of the fee to cover the 2 days she held the licence before surrendering it (£3.46);
  • Unprompted, it decided to make her an offer of £36.66 for the time and trouble she was put in dealing with the Council;
  • It reviewed similar cases over the last 12 months but found no case where an applicant asked for a refund; and
  • Confirmed it reminded officers across the service about the need to supply evidence when responding to Ombudsman enquiries. It also apologised for this failure.

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Final decision

  1. The Ombudsman found fault on Miss N’s complaint against the Council. The agreed action, and the action taken, remedies the injustice caused.

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Investigator's decision on behalf of the Ombudsman

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