A Camden shop owner and a local food company have faced lengthy delays in their claims for emergency Covid grants worth thousands of pounds after the council “failed to consider their applications properly”.
Local Government Ombudsman Michael King has raised concerns over the Town Hall’s handling of funds designed to help businesses survive the crippling economic impact of the pandemic.
It comes after the watchdog investigated complaints by two unnamed Camden traders who said the council’s interpretation of the rules caused them “distress”.
The council admitted it rejected a “few hundred” applications because of concerns over whether or not they were registered as ratepaying businesses before the pandemic took hold.
It revealed that it has since paid out a grant to one of the complainants, and that it is waiting for evidence of eligibility from the second business.
King said: “I am concerned there may be other businesses in Camden that have received flawed decisions about their business grant applications.”
He welcomed the council’s steps to look at other businesses that feel their applications were not processed properly.
By October 2020, the council had distributed £58m in business, retail and hospitality grants to 2,475 Camden traders, and a further £13.7m in small business grants to 1,375 traders.
Cllr Oliver Cooper, who leads Camden’s largest opposition group, said: “It’s likely that thousands of businesses didn’t receive the vital support the government gave them for months because Camden said ‘No’.
“I suspect that hundreds still haven’t received theirs – and some businesses will have gone bankrupt or fired staff thanks to Camden’s approach.
“This judgment from the Ombudsman shows the council was unfairly penalising businesses for no reason.”
When the council asked for more government advice on handing out the grants, it admitted there were “a few hundred” cases in which it had refused businesses trading by March 2020.
The emergency grants were launched by the government that same month, when it ordered the first national lockdown. The scheme was closed in September 2020.
The Ombudsman ordered the council to pay Mr H, who ran a shop, the £25,000 it believed he should have been given as a grant.
The shop owner bought the store from his employers Company A in 2019, before the pandemic. Neither he nor the previous owner told the council of the change in ownership or lease arrangement.
Mr H informed the council on 23 March and asked if he could apply for a grant.
Instead of paying Mr H the retail and hospitality support grant, the council used the ratepayers register and paid the £25,000 grant to Company A. It did not respond to Mr H until July.
Eventually it asked Company A to repay the grant and told Mr H he had lost out on a grant because he was not on the ratepayers’ database for 11 March 2020.
There was similar confusion in Mr G’s case. He has been in business in Camden since 2006 and runs a food company. Initially he ran a business, dubbed XYZ Ltd by the Ombudsman, before becoming a sole trader from 2015.
The council rejected his application for a £10,000 small business grant because he had not told them of the change in his business, even though he had evidence of a refund of rates to his personal account in 2016.
The council told the Ombudsman it found the premises “empty and unoccupied with a ‘to let’ sign” when it inspected them in June 2021, over a year after the grant application.
It claimed that no-one had traded there for two and a half years. Mr G disputed this and said “the premises closed in March 2020 when the government announced the first national lockdown”, and he has not been able renovate because of ill health.
The Ombudsman told the council to pay Mr G £100 “to reflect the time and trouble” he took over his complaint and to look at his grant application again.
The rules for the grants were designed to weed out people setting up fake companies to get grants, and many businesses had to exist by 11 March 2020 – before lockdown.
At first the council did not have the correct information about the ratepayers for the two businesses.
The Ombudsman criticised the council’s failure to use its discretion when it was given correct information about the ratepayers for the two businesss and erroneously interpreted guidance designed to prevent fake companies getting the emergency help.Instead it wrongly told the businesses it could not pay them the grants because they had not told it of the ratepayer changes.
King said he was concerned that other councils in the London Revenue Group, which Camden belongs to, might have taken a similar approach to rejecting grants.
He said: “I would also urge other member councils in the London Revenues Group, which may have taken a similar approach, to consider what proactive steps they should take to rectify any similar complaints they may have received.”
A Camden Council spokesman said: “We have listened carefully to the Ombudsman’s recommendations and have taken action in response to the complaints, which relate to the very first set of grants that were issued in response to the unprecedented challenges and demand caused by Covid-19.”
He added that the council will review the decision given to one of the businesses and has asked for evidence of its eligibility.
“This is however yet to be provided,” he said. “In the other case, the business has provided us with the required evidence and a grant has been paid to them.
“Since the start of the pandemic our teams have been working tirelessly to ensure that businesses receive the financial support that is available to them. We have issued more than £300 million in grant and rate relief to Camden businesses as we have supported them to overcome the challenges of the pandemic and to come back stronger.”