Sedgefield Borough Council has been criticised for its handling of a grant application.

The Local Government Ombudsman found several instances of maladministration in the decision-making process, which led to an applicant failing to be awarded a grant to improve his property.

The council has agreed to pay £8,025 to the complainant, who has not been named, and the ombudsman said that would remedy the injustice.

In her report, ombudsman Patricia Thomas said a landlord, referred to as Mr Ash, got a tenant to ask the council to serve a repairs notice.

The property was inspected and Mr Ash applied for a renovation grant, but because the council was implementing a new policy there was a delay in inspecting the property for grant purposes.

An inspection eventually took place, but it did not include an internal inspection and the council's assessment of work required varied considerably from Mr Ash's contractors' estimates.

Meanwhile, the council received information which cast doubt on Mr Ash's financial status and the grant was refused.

The ombudsman ruled: "There was some delay in carrying out the inspection and that which was done was cursory."

She also said: "The decision to refuse the grant was prejudiced by taking account of inaccurate information about Mr Ash's financial affairs. There were flaws in the council's reasoning and process, and failures to record information."

John Litherland, Sedgefield Borough Council's director of planning and technical services, said: "It is almost four years since this application was first received and the system has since been reviewed.

"At that time, substantial changes were being made to the grants system by central Government and interim arrangements were in operation.

"Sedgefield Borough Council was in the process of setting up the Home Improvement Agency to provide a superior service to assist those seeking help to improve their properties. New policies and procedures are now in place."

He said: "We co-operated fully and in a positive manner with the ombudsman's investigation, and Sedgefield Borough Council was commended in the ombudsman's report for its willingness to reach a settlement.

"We regret the circumstances, but since the new procedures have been implemented they have proved extremely successful and we have not experienced any further problems.