Summary: Mrs Y complained on behalf of Mr X about the Council’s decision to refuse Mr X a business grant, causing him stress, time and trouble and financial loss. We found no fault in the Council’s decision making however we found fault in the way it communicated with Mr X. We recommended the Council provide an apology, payment for distress and acted to prevent recurrence.

The complaint

1. Mrs Y complains the Council delayed considering Mr X’s request for a business grant and then unfairly refused it once the scheme had closed. Mr X says he suffered stress, was put to time and trouble in the process and had to sell his business below market value due to lack of funds.

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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’. 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)
3. 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)
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. I spoke to Mrs Y and I reviewed documents provided by Mrs Y, Mr X and the Council.
7. I gave Mrs Y and the Council an opportunity to comment on my draft decision. I considered their comments before making a final decision.

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What I found

Retail rates relief

8. The Government announced in the Budget on 29 October 2018 that it would provide a Business Rates Retail Discount, to apply in the years 2019/20 and 2020/21.
9. In response to the COVID-19 pandemic, in the Budget on 11 March 2020, the Government announced it would increase the discount to 100% and extend it to include the leisure and hospitality sectors.
10. Following the announcement on 23 March 2020 of further measures to limit the spread of COVID-19, the Government confirmed it had removed some of the exclusions for this relief, so that retail, leisure, and hospitality properties that had to close as a result of the restriction measures would now be eligible for the relief.
11. The Government referred to this extended retail rates relief as the Expanded Retail Discount.

Grant Funding Schemes

12. 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).
13. Of relevance to this case, businesses which, on 11 March 2020, would have been eligible for the Expanded Retail Discount (the “Discount”) were eligible for a Retail Hospitality and Leisure Grant (“RHL Grant”) of up to £25,000.
14. In April 2020 the Government published guidance for councils on how to apply the Discount; “Business Rates, Expanded Retail Discount 2020/21: Coronavirus Response Local Authority Guidance”.
15. This made clear the Discount applied to occupied businesses wholly or mainly being used for retail, hospitality or leisure purposes and reasonably accessible to visiting members of the public.
16. However, properties that closed temporarily due to the Government’s advice on COVID-19 should be treated as occupied for the purposes of this relief.
17. In July 2020 the Government announced the grant schemes would close on 28 August 2020.

Empty property relief

18. Gov.uk explains you do not have to pay business rates on empty buildings for the first three months. After this time, most businesses pay full business rates, whether they remain empty or not.

Principles of good administrative practice

19. In 2018 the Ombudsman published a guidance document setting out the standards we expect from bodies in jurisdiction “Principles of Good Administrative Practice”. We issued an addendum in response to the COVID-19 pandemic; “Good Administrative Practice during the response to Covid-19”. This shows we expected similar standards from councils, even during crisis working. The following points are relevant in this case.
• The basis on which decisions are made and resources allocated, even under emergency conditions, should be open and transparent.
• Decision reasons should be clear, evidence based and where necessary explained in the particular context and circumstances of that decision.

What happened

20. Mr X says he became liable for business rates at a property from October 2019. At this time the property was empty and the Council applied empty property relief.
21. The Council issued bills to Mr X showing empty property relief ended on 3 January 2020. This does not mean the Council became aware the property was occupied from this date, rather the relief had simply expired; see paragraph 18.
22. Mr X says he occupied and started trading from the property from 3 January 2020. However, I have not seen anything that suggests he told the Council.
23. On 11 March 2020 the Council’s records showed the property was empty.
24. In April 2020 Mr X applied for the RHL Grant.
25. The Council told Mr X he was not entitled to a grant. It referred to the eligibility criteria for both grant schemes and suggested some reasons why he may not be eligible. However, Mr X could contact the Council again if he believed it held incorrect information.
26. Mr X responded to say he did not understand why the Council did not apply the Discount or the RHL Grant as he appeared to meet the eligibility criteria. He asked the Council to provide reasons for its decision.
27. On 22 July the Council explained to Mr X he was not entitled to a grant as its records showed he received an empty property exemption. However, if he had occupied the property he should confirm the date and provide a supporting document. Additionally, he needed to apply for retail relief and send proof he was trading as a retail business. It referred to its website for further information.
28. On 27 July Mr X replied to say the empty property relief ended on 3 January and he then occupied the property and started trading. He asked the Council to explain why he did not meet the criteria for a grant. He also asked it to confirm his eligibility for the Discount. I note Mr X did not refer to or provide any supporting documents to show occupation, and he did not apply for retail relief or send proof he was trading as a retail business.
29. The grant schemes closed on 28 August 2020.
30. On 1 September the Council told Mr X that to consider retail rates relief he needed to provide proof confirming the date of occupation or date he began trading (e.g. invoices, trading figures etc). The Council did not further explain why he had not met the criteria for a grant or say whether it would still consider him for the grant.
31. Mr X responded on 27 October. He said the Council made him the liable ratepayer from 4 October 2019 and applied a three month empty property discount which ended on 3 January 2020. Since then he occupied and traded from the property. He believed he met the eligibility criteria for a grant and felt the Council was trying to frustrate the process. He asked for a detailed response based on the Government guidance and details of the complaints process should it refuse.
32. On 5 November the Council explained it made Mr X the liable ratepayer from 30 September and applied the 100% empty property exemption which expired on 3 January. It then applied the 0% empty property exemption from 4 January. It was unaware of his occupation until his email of 27 July. It then requested proof of occupation but had still not received this. It could not apply retail rates relief until he provided this. It again asked for proof of occupation and trading to consider rates relief. The Council did not address Mr X’s request for the grant or refer to Government guidance.
33. Mr X told the Council he became fully liable for rates as the occupier from 4 January and so it did not matter when he told the Council of his occupation and the date he started trading was not relevant. He could provide photo evidence of stock but even if he had not been in occupation he would be entitled to the grant as the liable ratepayer. The Council had still not explained its refusal with reference to the Government guidance.
34. On 30 November the Council again asked Mr X to provide proof of occupancy. It apologised for not addressing his query about the grant and explained entitlement for this was also based on occupation. Once he provided evidence he could apply for this. It also gave information about its complaints process.
35. On 10 December Mr X sent the Council photos of stock in his property and copies of utility bills to evidence occupation. He asked it to pay the grant and update his account.
36. On 22 January 2021 Mr X complained to the Council it had still not paid him the grant despite his providing all the requested documents.
37. The Council told Mr X the Government said the grants schemes should close on 28 August 2020. It did not accept new applications or process any incomplete applications after this date.
38. Mr X complained further that the Council initially refused the grant as he received empty property relief but this ended on 3 January and so its refusal was incorrect. He had explained this on 27 July however the Council did not then respond until 1 September, after the closing date. The Council did not ensure it had all the information it needed before the closing date and continued to correspond with him without telling him the scheme had closed. Further, in a phone call in January 2021 a Council officer told him the scheme closed in December 2020.
39. The Council explained at the time Mr X applied for the grant its records showed the property was empty and unoccupied. Therefore, based on guidance, it refused the grant. On 22 July it asked him for evidence of occupation and told him to apply for rates relief with evidence of trading. On 1 September it told him what evidence it needed to consider rates relief. It wrote to him again on 5 November and he provided evidence of occupation on 10 December. Upon this evidence it applied the Discount to his account, effective from 11 March 2020. The grant scheme closed on 28 August. As it did not receive evidence of occupation and trading from him until 10 December it could not consider a grant.
40. In response to enquiries the Council provided a copy of its records to show it updated its website on 23 July 2020 to warn the Government was closing the grant schemes on 28 August 2020. It provided a further record to show it updated its website on 1 September 2020 to say the grant scheme was now closed and it would not accept any further applications. Where an application had been submitted in time but the Council had requested further information, it was important to provide this as soon as possible to avoid the Council rejecting the application.
41. The Council said it had no records of any calls with Mr X regarding the grant.
42. In comments on my draft decision Mrs Y said:
• As the World Health Organisation declared a pandemic on 11 March 2020 and the Government imposed restrictions on the same day, Mr X closed his business temporarily in line with Government guidance.
• The Council’s website said it would apply the Discount to relevant businesses automatically; businesses did not have to apply for this. The Council should have applied this to Mr X’s business automatically and then awarded the RHL Grant.
• The Council, in response to enquiries, said a business had to receive retail rates relief to be eligible for the RHL grant but this was incorrect. Businesses had to be eligible for the Discount to get the RHL Grant.
• Mr X was the recorded ratepayer at the property for many years and was refurbishing the property from October 2019 following a rental period.
• Mr X was the person named on the ratings list, the owner and in occupation prior to the pandemic; none of the exemptions applied and he was eligible for the RHL Grant.
• The Council did not need evidence of occupation as the Government guidance told councils to treat properties as occupied.

Findings

43. It is not within my remit to consider Mr X’s evidence and make my own decision on his business’ eligibility for a grant. Rather my role is to investigate whether the Council followed a proper decision making process. That is, whether it took account of relevant information, law, policy and guidance before reaching a decision. I cannot question the decision outcome where the Council has followed a proper decision making process.
44. The Government guidance made clear a property had to be occupied and being used for retail, hospitality or leisure purposes on 11 March 2020 to qualify for retail rates relief; the Discount. And it had to qualify for the Discount to receive the RHL Grant.
45. I acknowledge that any business closed temporarily due to the pandemic was still to be treated as occupied. However, this did not mean a council should treat every business as occupied; it was only those that had to close temporarily. And there is no evidence Mr X told the Council this applied in his case. In considering whether the Council followed a proper decision making process, I must consider whether it took account of relevant information available to it at the time.
46. I note the Council’s website said it would apply the Discount automatically. However, I would only expect the Council to apply the Discount automatically in cases where it was clear to the Council that the business was eligible, which was not the case here.
47. The Council’s records, as at 11 March 2020, showed Mr X’s property was empty. It had no information that Mr X had since occupied the property or that he had temporarily closed due to the pandemic. Therefore, it initially refused the grant on the basis the property was unoccupied, in line with the Government guidance. I find no fault in its decision making.
48. On 22 July the Council asked Mr X to provide proof of occupation and proof of trading for it to reconsider his request. However, Mr X did not provide this evidence until December 2020, well after the scheme had closed. The Council refused to pay Mr X a grant in December 2020 as the scheme had closed. I find no fault in this respect.
49. While I am satisfied the Council properly reached its decision to refuse a grant, I find its communications with Mr X were inadequate. This is because:
• When the Council initially refused the grant it did not explain its reasons.
• The Council asked Mr X for further information to support his request but did not give a deadline by which he should provide this.
• The Council did not provide clear explanations with reference to the Government guidance, even when Mr X specifically asked for this.
• The Council did not make clear to Mr X the grant scheme had closed and it was too late to further consider his request for a grant, at the earliest opportunity.
• In November the Council told Mr X he could still apply for the grant, although the scheme had since closed.
50. I consider the shortfall in communications is fault. Mr X suffered frustration and distress due to the lack of clear information and he spent more time corresponding with the Council than should have been necessary. However, I cannot say Mr X missed out on a grant because of the Council’s fault. This is because the Council was clear it needed further evidence from Mr X in July 2020. I therefore consider he had a reasonable opportunity to provide this before the closing date of 28 August.
51. Mr X says the Council gave him further incorrect information by phone in January 2021, however at this stage I do not have sufficient evidence of this to find fault.
52. For the sake of completeness, I am satisfied the Council’s reference to retail rates relief, in its enquiry response, is a reference to the retail rates relief applicable in this case, which is also known as the Expanded Retail Discount.

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Agreed action

53. To remedy the injustice set out above I recommend the Council carry out the following actions:
54. Within one month
• Provide Mr X with a written apology;
• Pay Mr X £150 for distress and inconvenience.
55. Within three months
• Remind staff of the need to give clear, evidence based reasons for its decisions, explained in context, in line with the Ombudsman’s Principles of Good Administrative Practice.
56. The Council has accepted my recommendations.

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Final decision

57. I find no fault in the Council’s decision to refuse Mr X a grant but I find fault in its communications. The Council has accepted my recommendations and I have completed my investigation.

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Investigator's decision on behalf of the Ombudsman