CRAVEN District Council has been accused of 'fundamentally misunderstanding' the role of the local government ombudsman over the way it dealt with the complaints of two small business owners.

Councillors have now agreed to apologise and pay £500 to both of the complainants after the ombudsman said he was unhappy with the council's initial response to his first public interest report earlier this year.

In May, the ombudsman upheld the complaints of the business owners in relation to a discretionary grants scheme distributed by the council.

Following an investigation, the ombudsman found the council had been at fault and that this had caused injustice to the complainants.

He made a number of recommendations including the council apologising to the complainants, who were never named, and paying them both £500 'in recognition of distress caused'.

In June, the council's policy committee chose to 'reluctantly accept the ombudsman' s report and to ask the select committee to carry out a 'lessons learnt' exercise.

The committee however did not consider that the fault justified an apology or payment of £500.

A statement issued at the time said that the council was 'very disappointed' with the findings of the ombudsman and that it had been given very little time to set up the local discretionary scheme.

Now, following a further report by the ombudsman, issued after the council's initial response, councillors have agreed to apologise to the businesses, and pay the compensation.

A report to the policy meeting on November 30 was due to be discussed in private session, but ended up being discussed in public following a motion by Skipton member Cllr Robert Heseltine.

The report stated that following the committee's decision in June, a recording of the meeting and its decision was sent to the ombudsman.

The ombudsman replied he was not satisfied with the council's response, issued a draft further report and invited the council to comment.

The report to committee said: "In essence, the ombudsman's view is that the committee's decision was not a rational reason to refuse an ombudsman's recommendation' and that it 'appears the council has fundamentally misunderstood the (ombudsman' s) role."

After the meeting, Cllr Robert Heseltine said it was only right that the council put its hand up, apologised and paid the money to the complainants.

He said: "I moved that we do the decent thing. When you are found to have done something wrong, you put your hand up and pay.

"It was no better than a professional footballer ignoring the referee."

A spokesperson for Craven District Council said: ‘Members of policy committee agreed the recommendations set out in the Local Government and Social Care Ombudsman draft report. The council will be apologising to the two complainants and paying both £500 in recognition of the distress caused by raised expectations and uncertainty.”