Summary: Company X has made a complaint in relation to Transport for London’s decision to not pay a grant under the Mayor of London’s Scrappage Scheme. Company X says TfL has refused to make a grant payment due to it not satisfying the evidence requirements in time and in accordance with the Scheme’s terms and conditions. We found TfL failed to consider Company X’s circumstances and the reasons for the delay in providing evidence. It also failed to adhere to the established expectation that it would honour the grant payment on receipt of satisfactory evidence about the vehicles Company X purchased. This caused Company X an injustice, and TfL have agreed to remedy this.

The complaint

1. The complainants, who I refer to as Ms M and Ms P, are employees for and representatives of Company X. They are making a complaint against Transport for London (TfL). The complaint concerns TfL’s decision to not honour a grant payment to Company X under the Scrappage Scheme (the Scheme).
2. In summary, Company X says it purchased three new vehicles for approximately £62,000 following TfL’s acceptance of its application under the Scheme. It also scrapped its three older vehicles and was due to receive £7,000 for each vehicle scrapped under the teams of the Scheme.
3. Under the Scheme’s terms and conditions, Company X must provide evidence of the old vehicles being scraped and the purchase of new and qualifying vehicles. However, due to the COVID-19 pandemic and lockdown restrictions (including furlough arrangements), Company X was unable to satisfy the evidential requirements within the time period outlined in the Scheme’s terms and conditions. This resulted in TfL refusing to pay the grant, notwithstanding that Company X had scrapped its older vehicles and purchased new ones.
4. Company X says it has lost £21,000 due to TfL’s alleged failure to consider its exceptional circumstances which meant a delay in providing evidence. As a desired outcome, Company X wants TfL to honour the grant payment in full.

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What I have investigated

5. I have investigated whether TfL’s decision to refuse payment of the grant amount is consistent with the Scheme’s terms and conditions. I have also had regard to any procedural failings in reaching that decision.

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The Ombudsman’s role and powers

6. 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 or entity 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

7. I have reviewed Company X’s complaint to the Ombudsman and TfL. I have also had regard to the responses by TfL, supporting documents and the Scheme’s written terms and conditions. I invited both Company X and TfL to comment on a draft of my decision. Each of their comments were fully considered before a final decision was made.

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My findings

The Scrappage Scheme

8. the Scheme was launched by the Mayor of London to help tackle London's poor air quality. It enables drivers to scrap their older vehicles for new, higher efficiency, vehicles in exchange for a grant of up to £7,000 per vehicle. The Scheme is governed by a set of written terms and conditions.
9. Under the Scheme’s terms and conditions, for an applicant to be eligible for a grant payment, they must complete an application form relating to the vehicle(s) it proposes to scrap and purchase. If satisfied, TfL provide the applicant with written confirmation of their eligibility under the Scheme. This allows the applicant to scrap their old vehicle(s) and replace them with new and qualifying vehicle(s).
10. Subsequently, the applicant then has six calendar months from the date of the eligibility confirmation letter to comply with secondary eligibility checks to qualify for the grant payment (including, insurance details, proof of scrappage and log books (V5C) for the new vehicles etc.). The applicant must notify TfL immediately if they are unable to comply with the secondary eligibility checks.

Chronology of events

11. In March 2020, Company X applied for TfL’s Scheme to scrap and replace three vehicles which was successful. However, Company X subsequently closed due to the COVID-19 pandemic and furloughed its employees.
12. In July 2020, Company X reopened and scrapped its three older vehicles which were due to be replaced under the terms of the Scheme.
13. In August 2020, Company X provided TfL written evidence that it had paid the deposit for three new vehicles in order to replace those scrapped.
14. In September 2020, Company X paid the remaining amount for the replacement vehicles. It confirmed to TfL there would be a delay in receiving the new vehicles, though hoped to be able to provide evidence of the new vehicles by November 2020. Company X explained it was unable therefore to satisfy the further evidence requirements until these were delivered.
15. In October 2020, TfL emailed Company X requesting that is present evidence of the new vehicles purchased, including insurance details and log books. Company X explained however that it was not yet in a position to do this because the new vehicles had not yet arrived.
16. In December 2020, TfL contacted Company X requesting the same written evidence. Company X responded reminding TfL that delivery of the vehicles had been delayed due to the pandemic and these were expected in January 2021. It said it could not therefore give insurance details or provide a copy of the log books until the vehicles were delivered.
17. In January 2021, TfL sent a further request for the same information and documents within 10 working days. It did not address Company X’s email relating to the delay and that it was not possible to satisfy the request at this stage.
18. In March 2021, the new vehicles were delivered to Company X. It thereafter provided TfL the insurance details and log books for each new vehicle purchased in April 2021. No response was forthcoming from TfL which meant Company X chased for an update on two separate occasions.
19. In June 2021, TfL wrote to Company X rejecting the grant due to the requested evidence not being provided in time.

My assessment

20. The contract governing the Scheme is clear that evidence to qualify for the grant must be provided to TfL within six months from the date of the eligibility confirmation letter. Company X was unable to provide evidence due to the COVID-19 lockdown restrictions in place and resulting delay in the new vehicles arriving. However, Company X did notify TfL of the delay under the Scheme’s terms and conditions. Instead of terminate payment of the grant at that point, TfL does appear to have waived the six-month limitation period relating to the secondary evidence. This is because TfL made repeated requests for evidence after the six-month period ended, the latest being January 2021. In this correspondence, TfL requested evidence be submitted within 10 days. However, this failed to consider Company X’s circumstances about not yet being in receipt of the new vehicles. I consider Company X had a legitimate expectation that once it was in a position to provide the evidence, as requested, payment of the grant would be made available for each new vehicle.
21. In April 2021, Company X received the evidence to satisfy TfL in accordance with the terms and conditions of the Scheme and provided this, without delay. However, TfL rejected Company X’s application on the basis that the evidence had been provided late. In my view, the actions of TfL amount to service failure. This is because the correspondence from TfL suggests that it would make payment of the grant beyond the limitation period on receipt of evidence. In doing so, TfL was fully aware there was a legitimate delay in Company X’s ability to provide evidence, yet it failed to engage with Company X to understand the exact circumstances and when such evidence could be made available. TfL also accept its correspondence to Company X lacked clarity with respect to these issues.
22. In addition, the terms and conditions for the Scheme stipulate the applicant should contact TfL in the event of a delay relating to providing evidence. The documents in this case do show Company X complied with the requirement and in my view, this created an expectation that TfL would review the circumstances and have regard to the unique factors at play to inform next steps. There is no evidence to suggest TfL had regard to the circumstances of Company X and this demonstrates poor administrative practice. I also consider TfL showed a lack of understanding in relation to the pressures and challenges placed on Company X in light of the COVID-19 pandemic.
23. For the above reasons, I consider TfL was at fault. This meant that Company X’s evidence was not assessed to inform payment of the grants. Subject to the evidence satisfying the Scheme’s terms and conditions, non-payment of the grant has resulted in a loss to Company X of approximately £21,000. This is because Company X ordered new vehicles and scrapped its older vehicles in accordance with the Scheme’s terms and conditions. I therefore consider Company X has suffered an injustice by reason of the fault identified and I am therefore recommending a number of remedies to address this.

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Agreed action

24. To remedy the fault and injustice identified in this statement, TfL has agreed to perform the following actions by 8 April 2022:
1. Provide Company X a written apology which addresses the fault and injustice identified in this statement.
2. Review Company X’s secondary evidence to ascertain whether it satisfied the criteria set out under Schedule 2 of the Scheme’s terms and conditions. The assessment should exclude the limitation period.
3. If the evidence does satisfy the criteria, TfL should honour the full grant payment offered to Company X for each new vehicle it purchased.
25. In addition, TfL has agreed to review and, where appropriate, amend its policies relating to the limitation period where evidence cannot be provided due to exceptional circumstances and delays beyond the applicant’s control. This is only in the event the Scheme becomes operational again in the future.
26. By 9 May 2022, TfL will provide the Ombudsman evidence it has satisfied actions (a) to (c). TfL will provide evidence in respect of outcome (d) should the Scheme become operational in the future.

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Final decision

27. TfL failed to consider Company X’s circumstances and the reasons for the delay. It also failed to adhere to the legitimate expectation set that it would honour the grant payment on receipt of satisfactory evidence about the vehicles Company X purchased. This demonstrates poor administrative handling of the case and general service failure. The failings identified caused Company X an injustice and so I have recommended a number of remedies.

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Investigator's decision on behalf of the Ombudsman