Summary: The Council was at fault for not communicating properly with Mr X, for which it should apologise. I have not found fault with the way the Council considered whether the business was eligible for Small Business Rates Relief, which meant Mr X’s business was not eligible for the COVID-19 Small Business Grant.

The complaint

1. Mr X complained the Council:
• delayed in dealing with his application for a small business grant;
• repeatedly ignored his communications; and
• wrongly refused to pay the grant.
2. He said the Council’s failings put him to additional time and trouble pursuing the Council, and the lack of a grant payment added to the financial difficulties caused by the COVID-19 pandemic.

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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. We cannot question whether a council’s decision is right or wrong simply because the complainant disagrees with it. We must consider whether there was fault in the way the decision was reached. (Local Government Act 1974, section 34(3), as amended)
5. This complaint involves events that occurred during the COVID-19 pandemic. The Government introduced a range of new and frequently updated rules and guidance during this time. We can consider whether the council followed the relevant legislation, guidance and our published “Good Administrative Practice during the response to COVID-19”.
6. 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)

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How I considered this complaint

7. I considered:
• the information provided by Mr X and the Council;
• relevant law and guidance, as set out below; and
• our guidance on remedies.
8. Mr X and the Council had an opportunity to comment on my draft decision and I considered their comments before making a final decision.

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What I found

Relevant law and guidance

COVID-19 small business grant

9. In response to the COVID-19 pandemic the Government introduced two grant schemes to support businesses. The Department for Business, Energy and Industrial Strategy published guidance for councils on how to apply these: “Grant Funding Schemes” (March 2020).
10. Businesses which, on 11 March 2020, received Small Business Rates Relief (SBRR) were able to apply for a payment of £10,000.
11. Eligibility for SBBR was subject to section 43 of the Local Government Finance Act 1988. This said the rate applied to occupied businesses.
12. Government guidance, headed “Who will receive this funding?” said:

• “The person who according to the billing authority’s records was the ratepayer in respect of the hereditament on the 11 March 2020” (the term hereditament refers to any rateable property and/or land).
• “where the Local Authority has reason to believe the information they hold about the ratepayer on the 11 March is inaccurate they may withhold or recover the grant and take reasonable steps to identify the correct ratepayer.” (see Grant Funding Schemes – Small Business Grant Fund and Retail, Hospitality & Leisure Grant Fund Guidance – version 6, paragraphs 34 to 35).

13. Further government guidance discussed “Rating List Changes”. It said:

• “Any changes to the rating list (rateable value or to the hereditament) after 11 March 2020 including changes which have been backdated to this date should be ignored for the purposes of eligibility.
• Local authorities are not required to adjust, pay or recover grants where the rating list is subsequently amended retrospectively to 11 March 2020.
• In cases where it was factually clear to the Local Authority on 11 March 2020 that the rating list was inaccurate on that date, Local Authorities may withhold the grant and/or award the grant based on their view of who would have been entitled to the grant had the list been accurate.
• This is entirely at the discretion of the Local Authority and only intended to prevent manifest errors”. (reference as above - paragraphs 40 to 43).

14. The government also published ‘Frequently Asked Questions’ for local authorities administering these grant schemes. Question 34 asked the following: “Would businesses telling Local Authorities now that they moved in prior to 11 March 2020 be eligible for a grant if they are entitled to Small Business Rate Relief?”. The answer given was: “Any changes to the rating list after 11 March 2020, including changes which have been backdated to this date, should be ignored for the purposes of eligibility. Local Authorities are not required to adjust, pay or recover grants where the ratings list is subsequently amended retrospectively to 11 March 2020. The eligible business is the ratepayer in Local Authority records for 11 March. However, Local Authorities have the discretion to depart from this if they know that record was incorrect”.

Liability for business rates

15. The Local Government Finance Act 1988 (LGFA 1988) identifies three categories of ratepayer:
• occupiers;
• owners; and
• persons named in central rating lists.
16. Case law says the four conditions of rateable occupation are:
• actual occupational or possession;
• exclusive occupation or possession;
• occupation or possession which is of some value or benefit to the occupier/possessor;
• occupation or possession which has a sufficient quality of permanence.
17. There is significant case law on rates liability. It is for a council to decide who is the correct liable ratepayer. However, the Ombudsman can consider if a council has followed a proper decision making process when deciding who is liable to pay rates.

What happened

18. Mr X says he took over the tenancy for his business premises in November 2019 and applied for a small business grant in April 2020. He has provided an email to the Council dated 17 April referring to a conversation with an officer (not named), and enclosing a copy of his lease and a completed small business rates relief (SBBR) form.
19. The Council confirmed he was not recorded as the ratepayer at 11 March 2020. On 12 May 2020, it asked him to provide evidence of occupation at that date in the form of utility bills, invoices addressed to the business at that address and proof of payment of rent.
20. On 5 June, Mr X provided a letter from the estate agents dated 8 November 2019 and referring to a lease due to start on 11 November 2019 at the relevant address. The Council asked again for copies of bills addressed to the business at the trading address. Mr X asked it to contact the estate agents for the information it needed. The Council responded that it was for Mr X to provide evidence of occupation, such as utility bills or invoices for stock/works in the name of the business.
21. On 23 June, Mr X provided a further copy of the estate agent letter and an invoice for rent, which did not indicate the business address it referred to. On 27 June 2020, Mr X asked for an update about the grant. He sent further emails on 7 July, 10 July and 2 September 2020. He emailed again on 12 January 2021, asking the Council to treat his email as a complaint. Mr X told me he had also tried multiple times to contact the Council by telephone but was not able to speak to anyone. He complained to us in May 2021.
22. In response to my enquiries, the Council provided relevant documents and said:
• Mr X was not the liable ratepayer as a 11 March 2020;
• Mr X had not provided evidence of occupation at that date, as requested;
• It has no record of an application for a small business grant in 2020;
• It responded to the complaint but has not been able to provide a copy of its response. It said it set up a general email address to deal with grant enquiries, which has since been deleted and its IT team has confirmed the email response cannot now be recovered.

My findings

23. We are not an appeal body. Where there is no fault in the Council’s decision making process, I cannot comment on the decision reached.
24. In this case, Mr X was not listed as the liable ratepayer for the premises in question on 11 March 2020. This meant the business had no automatic entitlement to the small business grant. However, the Council could consider paying a grant if it was satisfied that:
• the business was the ratepayer;
• the premises were occupied by the business and entitled to SBRR; and
• that SBRR should be back-dated to 11 March 2020 (or earlier).
25. Therefore, the Council asked Mr X for evidence of occupation. He provided a copy of his lease, which shows he was entitled to occupy the premises but does not prove actual occupation. He also provided an invoice for rent but this did not specify which premises it related to. He was asked to provide utility bills, and invoices addressed to the business at the trading address. He did not provide these. Based on the evidence Mr X provided the Council was not satisfied the business was occupying the premises at the relevant date. There was no fault in the way it considered this.
26. I note that despite evidence Mr X’s business has a lease, the Council does not consider the business the liable ratepayer for the premises. I consider it could have provided a clearer explanation for this decision. But I find no fault in how the Council considered Mr X’s evidence that led it to decide his business was not in occupation of the premises. Consequently, there can be no fault in the Council’s decision not to award SBRR on the premises and so Mr X’s business could not receive the small business grant either.
27. I have not seen evidence the Council wrote to Mr X after considering the further evidence he provided on 23 June 2020 to confirm it was not amending its business rates records and its reasons, nor explaining the business was therefore not eligible for the small business grant. The Council said it responded to the complaint in January 2021, although Mr X says he did not receive a response and it cannot provide a copy of it. There is no record to show the Council responded to emails from Mr X about grants for this business from July 2020 onwards. Whilst I appreciate the Council was dealing with a considerable number of COVID-19 grant applications during this period, I consider the lack of communication amounts to fault.
28. Although this may have caused Mr X some frustration and he was put to the time and trouble of pursuing the matter, I consider the matter could have been resolved sooner if Mr X had provided all the information the Council asked for in June 2020. Therefore, I consider an apology is a sufficient remedy. It should, however, remind relevant staff of the importance of providing a written decision in response to requests to update business rates records.

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Agreed action

29. The Council will, within one month of the date of the final decision:
• apologise to Mr X for its failure to respond to emails and explain why it was not updating its business rates records; and
• remind relevant staff to provide a written decision in response to requests to update business rates records.

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Final decision

30. I have completed my investigation. I have found fault that caused personal injustice. I have recommended action to remedy that injustice and prevent recurrence of the fault.

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Investigator's decision on behalf of the Ombudsman