Council agrees to pay complainant £10k after Ombudsman investigation into refusal of Small Business Grant

Croydon Council has agreed to pay £10,000 after a Local Government and Social Care Ombudsman investigation into the local authority’s decision to refuse a Small Business Grant (SBG).

Miss X complained that she has missed out on the SBG – introduced by the Government in response to the pandemic – and a discretionary grant because of the council’s fault.

The Ombudsman’s report found that:

• Croydon initially refused Miss X a Small Business Grant as she was not the recorded ratepayer on 11 March 2020. At the time all business rates accounts at Address A were in the name of Company A; the landlord. The Ombudsman found no fault in its decision making.
• The council became aware its record of the ratepayer may not be accurate and it then took steps to identify the correct ratepayer. This was in line with Government guidance.
• By 27 August 2020 the council had recorded Miss X’s business as the ratepayer for the relevant period. It had also applied Small Business Rates Relief to her account. The council still required Miss X to apply for the SBG. However, the Ombudsman said he was satisfied that upon receipt of this application the council would have paid the grant.
• Croydon sent Miss X a weblink to apply for the SBG on 27 August. It accepted this did not work and that it failed to send a working link. This amounted to fault, the Ombudsman said. “As a direct result Miss X was unable to apply for the grant before the closing date.”

The Ombudsman also said that while he recognised councils were not expected to pay any grant after the scheme closed, this did not prevent councils from paying amounts equal to the grant where appropriate to remedy fault. “And although the Council was not expected to have a formal appeals process we would still expect it to offer a right of review through its complaints process.”

In the circumstances, the Ombudsman considered that Croydon did not provide an appropriate remedy for accepted fault through its complaints process. This amounted to fault. Miss X was then put to time and trouble complaining to the Ombudsman.

The report noted that there was no reason why the council’s decision to refuse the SBG would have prevented Miss X applying for a discretionary grant. “The Council published details of its scheme on its website and it was open to Miss X to apply if she wished. I therefore cannot say Miss X missed out on a discretionary grant because of the Council’s fault,” the Ombudsman said.

To remedy the injustice the Ombudsman recommended that Croydon:

• provide Miss X with an apology;
• pay her £100 for time and trouble;
• pay her £10,000, equivalent to the grant payment she missed;
• share the Ombudsman’s Principles of Good Administrative Practice with staff “to ensure they are aware we expect councils to offer a review or appeal and suitable remedies for accepted fault”;
• share this decision with other businesses at Address A and allow them to request a review of the council’s decision on their entitlement to a business grant, if not previously provided.

Croydon has accepted the Ombudsman’s recommendations.