The district auditor's report found that Hertfordshire County Council had had to secure repayments of pounds 400,000 from Quantum Care, a not-for-profit organisation set up by the council itself, following checks on the accounts.
In 1993 the council changed the way it provided residential care, transferring 31 elderly persons' homes to Quantum Care. While the aims of the transfer have been "substantially achieved or exceeded", the auditor found there had been "deficiencies" in the management of the contract.
The Hertfordshire Nursing and Residential Care Association, which represents the private sector, last year sought a public interest report to look at weaknesses in the arrangements the council had made with Quantum Care for "securing economy, efficiency and effectiveness in the use of resources".
In 1994-5, pounds 13.5m was paid to Quantum Care under the terms of the contract which obliged the council to purchase at least 85 per cent of available residential and nursing home places. The HNRCA queried the 1994/5 accounts, and subsequent checks by the council showed it had overpaid Quantum; pounds 400,000 was then recovered for the year 1995/6. The reliability of council data was also called into question.
A spokesman for HNRCA said that the association hoped the council would look again at the contract that they have with Quantum Care. "If this pounds 400,000 had been available, how many more people in Hertfordshire could have received services which were not available because of financial restraints?"
However, Bill Ogley, chief executive of Hertfordshire County Council said: "The teething problems of the transfer have not in any way disadvantaged the public or our elderly clients."
Spending on community care services has more than doubled since local authorities were given responsibility for funding placements in residential and nursing homes, according to the Local Government Management BoardReuse content