Summary: The Council was at fault when it incorrectly advised Mr X about the type of licence needed for his new business. The Council has agreed to pay Mr X £300 in recognition of avoidable frustration and raised expectations caused by this fault. The Council has also agreed to our service improvement recommendation.

The complaint

1. Mr X complained the Council twice gave him incorrect advice regarding what type of licence he needed for his business.
2. Mr X says this poor advice caused him financial loss, frustration and uncertainty.

Back to top

The Ombudsman’s role and powers

3. 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)
4. 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)

Back to top

How I considered this complaint

5. I considered the information provided by Mr X and the Council.
6. I considered our Guidance on Remedies.
7. I considered the comments Mr X and the Council made on my draft decision statement before making this final decision.

Back to top

What I found

What happened

8. Mr X set up his business in 2020. Beforehand he met with the Council so it could tell him what kind of licence he would need to sell his goods.
9. At this time, the Council advised Mr X he would just need a concession licence. It said he could have this licence at the rate of £200 for the first year and £500 per year after that. Mr X only paid up front for the first year, costing him £200.
10. However, after Mr X started trading, he learned that the concession licence alone was not sufficient and he would need an additional licence. As he did not have both, this meant he could not trade as planned.
11. Initially the Council advised him that the additional licence needed was a pedlar’s licence. This is a licence that lets someone sell goods while they are on the move. This was also incorrect advice and caused Mr X embarrassment, as he said he had to go to the police station to apply where he was told he had wasted police time.
12. Finally, the Council informed Mr X that the licence he needed in addition to his Concession licence was a street trading permit, which would cost £1,600 a year. Mr X said he would never have started the business had he been aware that the licence would be this price.
13. Mr X complained to the Council and the Council accepted fault. The Council apologised to Mr X and offered to refund the £200 he had paid for the first year’s Concession licence. Mr X did not pay for any other licences up front.
14. Mr X refused this £200 payment. Mr X says the level of uncertainty he experienced because of the Council’s mistaken advice warrants a higher remedy payment, as he would not have taken out a loan to set up the business had he been advised correctly about the cost of the street trading permit. Mr X also said his mental health was very negatively affected by this experience.
15. Mr X paused trading from the date his first licence was found to be invalid and has not traded since.

My findings

16. The Council gave Mr X the wrong advice. Because of this, it was right to offer to refund Mr X £200 for the cost of the concession licence, as at that time, he had not been advised that he would need an additional licence to trade. If Mr X has not done so already it is still open to him to accept this refund.
17. But this refund only remedies the avoidable cost to Mr X directly resulting from the Council’s incorrect advice. Due to the uncertainty and raised expectations caused to Mr X by the fault, I have recommended a further financial remedy along with additional licence training for relevant Council staff.
18. I have not recommended a financial remedy in recognition of any costs Mr X incurred from setting up his business. This is because the Ombudsman cannot remedy for a potential loss of future earnings because we cannot know what a complainant may or may not earn in the future.

Back to top

Agreed actions

19. The Council had already agreed to refund £200 to Mr X for his first year’s Concession licence fee. Mr X initially refused this. However, as Mr X was waiting for the outcome of our investigation before proceeding, it will remain open for Mr X to accept this offer.
20. In addition to the £200 refund already agreed, within one month of the date of the final decision, the Council has agreed to:
• Pay Mr X £300 as recognition of the avoidable frustration and raised expectations caused by him receiving incorrect advice regarding his trading licence.
21. Within two months of the date of the final decision, the Council has agreed to:
• Remind relevant staff, through appropriate training, and across departments where necessary, of the criteria for different licence types – in particular the criteria for pedlar’s licences, street trading permits and concession licence agreements.

Back to top

Final decision

22. I have found fault leading to personal injustice and recommended actions to remedy the injustice caused and to prevent the fault happening again in future.

Back to top

Investigator's decision on behalf of the Ombudsman