The Local Government and Social Care Ombudsman has criticised the way a north Yorkshire district council administered a discretionary grant scheme which was designed to help businesses impacted by COVID-19.

In March and May 2020, the Government introduced grant schemes to support businesses impacted by the pandemic. Businesses who qualified under these schemes could receive grants of £25,000, £10,000 or any sum under £10,000.

The Ombudsman was contacted by two small business owners who complained about the way Craven District Council handled their grant applications.

In the first case, a man who runs a small business from a shared office was awarded a grant of £1,000, later increased to £2,000 on appeal. The second man, who runs a business from his home, was awarded £2,000. That man also appealed and was unsuccessful.

The Ombudsman’s investigation found a lack of transparency with the way the council recorded how it decided the level of grants businesses would receive. The council decided it would favour some sectors over others, but did not publish this information. It also gave more weight to the business sector than it did to the size of the business or their costs and losses - despite saying these were key deciding factors. The council therefore raised some small business owners’ expectations that they may receive grants of up to £5,000 when this was rarely the case.

The investigation also found a lack of record keeping explaining the council’s individual decisions and inconsistent decision making, raising concerns with the way the council allocated its grants, and at times made awards to businesses in direct contradiction to the rules of its scheme. 

Michael King, Local Government and Social Care Ombudsman, said:

“We have carefully considered how the council had to react quickly to new challenges in preparing its COVID support scheme last year, but have decided it still failed to administer it properly.

“We published guidance to councils on good administrative practice during the pandemic, and advised them that those basic principles of openness and transparency should remain the bedrock of councils’ work regardless of the external pressures they are under.

“I hope that the ‘lesson learned’ exercise I have asked the council to carry out will help inform good practice in any future policies and procedures both this, and any other council, introduces.”

The Local Government and Social Care Ombudsman’s role is to remedy injustice and share learning from investigations to help improve public, and adult social care, services. In this case the council should apologise to both men and pay them £500 in recognition of the distress caused by its raised expectations and uncertainty.

The Ombudsman has the power to make recommendations to improve processes for the wider public. In this case the council should ask its scrutiny committee to carry out a ‘lessons learned’ exercise, and provide clear guidance to staff setting out records they should keep.

Article date: 18 May 2021