Summary: The Ombudsman will not investigate Mr X’s complaint about the way the Council managed its bus company’s closure. This is because the complaint concerns actions relating to a commercial transaction/relationship between the Council and the bus company and these actions did not cause Mr X significant personal injustice. We also cannot achieve the outcome Mr X wants.

The complaint

1. The complainant, Mr X, complains about the way the Council managed the closure of a company providing bus services in its area. He says this has caused worry and uncertainty for residents and those employed by the company.

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The Ombudsman’s role and powers

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’. We provide a free service, but must use public money carefully. We may decide not to start or continue with an investigation if we believe:

• it is unlikely we would find fault, or
• the fault has not caused injustice to the person who complained, or
• the injustice is not significant enough to justify our involvement,
• we cannot achieve the outcome someone wants.

(Local Government Act 1974, section 24A(6), as amended)

3. The Local Government Act 1974 sets out our powers but also imposes restrictions on what we can investigate.
4. We cannot investigate a complaint if it is about certain types of commercial transactions. (Local Government Act 1974, Schedule 5/5a, paragraph 3, as amended)
5. We cannot investigate a complaint if it is about a personnel issue. (Local Government Act 1974, Schedule 5/5a, paragraph 4, as amended)

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How I considered this complaint

6. I assessed Mr X’s complaint in accordance with the Local Government Act 1974 and our Assessment Code.

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What I found

7. A council-run company provided bus services in the Council’s area until early 2020; it was owned and funded by the Council but the company has now gone into liquidation as a result of significant financial losses.
8. Mr X is unhappy the Council has accepted no liability for the company’s demise and issued no statements to clarify what was going on. This caused uncertainty for local residents and employees. Mr X says the Council should be punished for the way it has treated people and for failing to properly manage the company’s closure.
9. The Ombudsman will not investigate this complaint. The Council’s support of the bus company concerns a commercial transaction between the parties which is not subject to investigation by the Ombudsman. Its decision not to continue to support the company, and therefore to allow it to go into liquidation, concerns the same point and we cannot look at this either.
10. The law also prohibits us from investigating complaints about personnel issues and we cannot therefore investigate any complaint that the Council failed to update the company’s employees about its future or to better manage the termination of their employment. And this is not an issue which affects Mr X personally in any event.
11. While Mr X may have experienced uncertainty as a result of the company’s collapse this is not a significant enough injustice to warrant investigation. We also cannot achieve the outcome Mr X wants as we have no power to punish councils.

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Final decision

12. The Ombudsman will not investigate this complaint. This is because the substantive issue concerns the Council’s actions relating to a commercial transaction between it and the bus company which did not cause Mr X significant personal injustice.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman