A businessman suffered “distress and uncertainty” after missing out on a £10,000 Covid-19 grant because of mistakes by Haringey Council, according to the Local Government Ombudsman.

The ombudsman found the council failed to follow government guidance when deciding on the man’s eligibility for the money and criticised the authority for further hold-ups in updating its records.

The council has apologised and paid £10,000 to make up for the grant and an extra £600 in compensation to the business owner.

Grants of £10,000 were provided by the government to support small businesses during the pandemic. These were paid to the person recorded as the ratepayer on March 2020. When councils believed the information they held on the ratepayer was inaccurate, they could withhold or recover the grant and take reasonable steps to identify the correct ratepayer.

The business owner, referred to by the ombudsman as Mr X, applied for a grant in April 2020. But the council refused to pay as the property was no longer on a list compiled by the Valuation Office Agency, having been split into two units during the same month, backdated to 2017.

It refused the owner’s application for a grant at one of the units, claiming he was no longer eligible under government guidance because he occupied both. But the owner said he was not liable for unit B, as it was occupied by someone else.

The ombudsman said the council should have decided on a small business grant for property A based on the information it held on March 11, 2020, but it went against government guidance by taking account of changes made after this date. As a result, the owner missed out on the £10,000 grant.

After the business owner claimed not to occupy one of the units, the ombudsman found the council did not respond to him or tell him what evidence it needed to change its records. This meant he was unable to correct the council’s records and apply for a small business grant at the unit he occupied before the scheme closed.

The ombudsman said the business owner “was put to avoidable time and trouble” as he tried to resolve the issue and “suffered distress and uncertainty throughout”.

A council spokesperson said: “The council is committed to supporting local businesses where possible and will continue to improve its services for residents across the borough.

“Unfortunately, the council was unable to award this grant before the Government closed the scheme in September 2020. This was due to a delay in receiving information relating to the occupation of the business premises from a third party.

“However, as agreed with the ombudsman, the council has now apologised to the customer for the delay in dealing with correspondence. We have compensated them for the delay and uncertainty as well as with a payment in lieu of the grant.”