The Local Government and Social Care Ombudsman received a complaint from the woman - referred to as Miss X - relating to the European Regional Development Fund (ERDF), which offered grants between £1,000 and £3,000 to stricken businesses.
Barnsley Council oversaw the grant scheme from November 25, 2020 and closed it ten days later.
The application form asked applicants to show their business had been adversely impacted by Covid-19 and provide evidence of at least a 20 per cent decline in turnover since the pandemic’s start.
Miss X applied for a grant on December 2 before the deadline and was told by the council that her application had been refused on December 17.
She then complained on December 22 that she has a disability and found the process ‘discriminatory’ given the short time frame to make a claim.
The ombudsman report, obtained by the Chronicle, said: “The council published details of its grant scheme on its website - this explained it had funding to support small and medium-sized enterprises to adapt and diversify following the impact of Covid-19.
“Under the Equality Act 2010, those providing a public function must ensure a disabled person can use any service as close as it is reasonably possible to get to the standard usually offered to non-disabled people.
“Miss X complained about the council’s administration of the business grant scheme, its decision on her application and its complaint handling, causing her distress and financial loss.
“We found the council at fault of causing Miss X injustice.
“We recommended the council provide Miss X with an apology, payment for distress, feedback on her grant application and evidence it will carry out equality impact assessments in future.
“The council has accepted our recommendations.”
In her complaint, Miss X also claimed she was not offered any reasonable adjustments, other applicants were given support with their applications but she received none, and when she asked the council to review her decision taking into account her disability, it allegedly refused.
Coun Tim Cheetham, cabinet spokesperson for regeneration and culture, confirmed the council’s issued a written letter of apology to Miss X, as well as the compensation as instructed to do so.
He added: “The council administered this scheme across the region and during this time, staff worked extensively and tirelessly to deliver much-needed support to businesses across the borough.
“The compensation and letter have been issued in direct response to the ombudsman’s findings and learnings have been implemented within this service.”