Summary: Mr B complained the Council misled him into thinking his business would receive a grant payable to support businesses impacted by COVID-19. We upheld the complaint finding the Council sent Mr B a series of emails which caused confusion and uncertainty. The Council accepted these findings and at the end of this statement we set out the action it has agreed to remedy that injustice.

The complaint

1. I have called the complainant ‘Mr B’. He complains the Council misled him into thinking his business could receive a grant payable under a government scheme to support businesses impacted by the COVID-19 pandemic. Mr B queries if the Council’s subsequent refusal of a grant award was correct.
2. Mr B says because of the Council’s wrong advice he suffered a lot of anxiety and worry at what was a difficult time for his business. The lack of financial support worsened his financial position at a time when his business was already in debt.

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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. We 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. 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”.
5. 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

6. Before issuing this decision statement I considered:

• Mr B’s written complaint to the Ombudsman and any supporting information provided including in a telephone conversation;
• information provided by the Council;
• relevant law and guidance as referred to in the text below.

7. I gave Mr B and the Council opportunity to comment on a draft of this decision statement. I took account of any comments made before finalising the statement.

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What I found

Grant schemes to support businesses impacted by COVID-19

8. In March 2020, in response to the COVID-19 pandemic, the government created grant schemes for small businesses to be administered by local authorities. These included the small business grant fund (SBGF). The scheme closed in August 2020.
9. To be eligible to receive a small business grant a business had to be eligible to receive small business rate relief (SBRR) or rural rate relief. Eligible businesses with a rateable value of less than £15,000 would receive a £10,000 grant.
10. 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) (see Grant Funding Schemes – Small Business Grant Fund and Retail, Hospitality & Leisure Grant Fund Guidance – version 6, paragraphs 34 to 35).

11. 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”. (see Grant Funding Schemes – Small Business Grant Fund and Retail, Hospitality & Leisure Grant Fund Guidance – as above, paragraphs 40 to 43).

12. The Valuation Office Agency (VOA) provides valuations and property advice to support taxation and benefits to the government and local authorities in England, Scotland and Wales. It compiles and maintains lists detailing the rateable value of commercial properties for business rates.

Chronology of key events

13. Mr B has a retail business. It moved into premises in June 2019. Those premises were formed from the sub-division of a larger retail shop.
14. In March and April 2020 Mr B sent the Council four emails asking it to set up a business rates account for his premises, allow him to apply for SBRR and allow him to apply for a grant. Mr B received no reply to these emails. I note two were sent to an incomplete email address.
15. In May 2020 Mr B asked the Council again if he could receive any financial support, having heard of the grant schemes set up by government to help businesses impacted by COVID-19.
16. The Council replied saying it had no record of his business premises. As the premises were not on the rating list the Council said it could not pay a grant to Mr B. It advised him to contact the Valuation Office Agency (VOA) to arrange for his premises to appear on the rating list. Mr B did this the same day,
17. On 22 May 2020, Mr B then sent an email to the Council asking: “can I reapply after my business has been bought into rating”.
18. The Council sent two separate replies to this email. In the first reply, dated 26 May, the Council said: “you may be allowed to still claim the Small Business Grant after the property has been brought into rating”. It told Mr B to get back in touch once the VOA had considered if the premises should be included on the rating list.
19. In the second reply, dated 3 June, the Council said Mr B’s premises were not on the rating list. It said: “if the unit is brought into rating it depends on rateable value given to the unit whether you would be entitled to any relief”.
20. On 29 June 2020 Mr B sent an email to the Council saying he was enclosing “all the relevant information as advised on the Council website for people not currently set up for business rates”. Mr B enclosed records relating to his business such as bank statements, a copy of his lease, utility bills and so on. He also enclosed an application for SBRR.
21. The Council replied on 1 July 2020 saying Mr B did not qualify for funding from the SBGF as his business address was not on the rating list.
22. In early August 2020 the VOA advised the Council that Mr B’s premises should be brought into the rating list with a rateable value of less than £15,000. It backdated the change to June 2019. Mr B contacted the Council a few days later asking it to now “process my application as now my property has been bought into the rating list”. Mr B sent the Council attachments relating to his business such as bank statements, his lease and so on.
23. On 18 August 2020 the Council told Mr B he must complete a separate application to apply for funding from the SBGF. Mr B duly completed an application on 20 August. He again included supporting information about his business.
24. On 21 August the Council, via the same officer who wrote to him on 18 August, refused Mr B a grant. It said that to qualify for a grant Mr B’s business premises had to be on the rating list on 11 March 2020. It quoted some of the Government guidance I referred to at paragraph 11 above. It said that as the Council did not know of Mr B’s business premises before 11 March it could not use any discretion to pay him a grant.
25. But on 25 August the Council wrote to Mr B saying it was still giving consideration to paying him a grant. And on 28 August 2020 the Council wrote to Mr B saying there would be a delay before it processed his grant application. Mr B spoke to the officer who sent that message. He says that in that call he was led to believe an application could yet be successful. The Council does not record this in its note of the call. But it does imply there was discussion with Mr B about his communications with the VOA and that it gave Mr B advice on claiming SBRR.
26. On 2 September 2020 a note on the Council’s records says Mr B had been refused a grant from the SBGF. It recorded the same reason as explained in paragraph 24. The Council did not contact Mr B again about this matter. But on 3 September it applied SBRR to his business rates account.
27. Mr B subsequently complained. He said the Council officers had misled him and delayed making a decision on whether he could receive a grant, leading him to believe he would receive support from the SBGF. He complained at the lack of financial support from the Council arguing he should receive a grant payment. Mr B explained he was in poor health and the distress caused by this matter added to that.
28. In its replies, the Council has reiterated the reason why it does not consider it could pay Mr B a grant and defended the time taken to reach this decision. It considered Mr B had misunderstood its emails but accepted they “could have been more explicit” in their content.

My findings

29. I find no fault in the Council’s decision that Mr B did not qualify for funding from the SBGF. The Government guidance I quoted at paragraph 11 above explains the presumption that where business premises were not on the rating list on 11 March 2020 there would be no entitlement for a grant if they were later brought into the rating list and the listing backdated to cover this date. The Council did have some discretion. But was only encouraged to use this in cases where it knew on 11 March 2020 that its rating list may be incorrect.
30. There is no suggestion in this case the Council knew on 11 March 2020 the rating list was incorrect in respect of the premises rented by Mr B. I find the Council therefore decided to refuse Mr B a grant in line with Government guidance.
31. I have gone on next to consider the Council’s communications with Mr B. He did not learn he would not receive a grant until August 2020, around four months after he first asked the Council about his potential entitlement. The Council sent five emails to Mr B between his first enquiry in May 2020 and that time. I note that throughout this period the government guidance I quoted above was in force, having been initially published in late March 2020.
32. The first email Mr B received was incomplete as it simply stated his business could not receive a grant as the premises were not on the rating list. This over-simplified the position as I have explained it with reference to the government guidance.
33. The second email Mr B received, in reply to his of 22 May, said he ‘may’ receive a grant if his premises were included on the rating list and the listing backdated to encompass 11 March 2020. This was not factually incorrect because the Council had some discretion. It could pay grants to businesses whose premises were not on the rating list on 11 March 2020. But it could only exercise discretion to do so in limited circumstances. The email did not explain this. So, it too was incomplete.
34. The third email Mr B received, again sent in reply to his of 22 May, referred instead to SBRR. So, like the email of 22 May, it did not properly answer Mr B’s question about any potential entitlement to a grant if the VOA decided his business premises should be included on the rating list.
35. The fourth email sent by the Council on 1 July, in reply to that of 29 June, told Mr B he could not receive a grant but the explanation given was again incomplete. It is also not clear to me Mr B’s email of 29 June was referring to a grant application as he had enclosed a completed SBRR application. Mr B could not receive SBRR at the time as his business premises were not yet on the rating list. But the email failed to refer to SBRR at all or clarify the difference between applying for a grant and SBRR.
36. The fifth email Mr B received on 18 August encouraged him to apply for funding from the SBGF using a particular form. Yet the Council knew all the facts around the listing of Mr B’s premises. I am not clear therefore why a form was needed when the Council could have communicated its decision of 21 August at this time. I note it was the same officer who sent both communications.
37. I also note once Mr B had completed that form he was told the Council was still processing and considering his application, after it had written to him refusing him a grant. He also received this impression after speaking to the officer who sent that email. There is nothing in the officer’s note of the call which leads me to think this was not the case.
38. Finally, I also note that before the Council began corresponding with Mr B about his case he had been in contact with it about setting up a business rates account, applying for a grant and SBRR. He appears to have sent four emails with no reply. I note two of those emails do not appear to have been correctly addressed. But the other two were and it is a further fault that Mr B received no acknowledgment or reply to those.
39. I recognise during the events covered by this complaint the Council was operating at a time of exceptional pressure administering new grant schemes and adapting to new ways of working. Not all these emails on their own would justify a finding of fault as in some cases they simply fell short of best practice, being incomplete in the advice given. But the combined impact of these emails and the delay in replying to Mr B’s initial communications justifies a finding of fault. Because the Council missed numerous opportunities to explain to Mr B the very limited circumstances where it could pay a small business grant for business premises which did not appear on the rating list on 11 March 2020. They also failed to draw the distinction between eligibility for a grant and SBRR.
40. I find the consequence of the emails was that some gave Mr B the impression, or did not correct him of the impression, his business might qualify for a grant. I do note that some emails said his business would not qualify. But overall, I still consider the emails created unnecessary confusion and uncertainty for Mr B over a period of around three months. I consider that an injustice.

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Recommended action

41. The Council accepts these findings. To remedy the injustice set out at paragraph 40 it has agreed that within 20 working days of this decision it will:
1. apologise to Mr B accepting the findings of this investigation;
2. pay Mr B £200 in recognition of the distress caused.
42. I have decided it is not appropriate in this case to also recommend any procedural improvements as those grant schemes administered by councils and set up to support small businesses impacted by COVID-19 have now closed.

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Final decision

43. For reasons set out above I uphold this complaint finding fault by the Council causing injustice to Mr B. The Council accepts these findings and has agreed to take action to remedy that injustice. Consequently, I can complete my investigation satisfied with its response.

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Investigator's decision on behalf of the Ombudsman