Tameside MBC's district auditor this week criticised the council's failure to prevent a company it set up to run 12...
Tameside MBC's district auditor this week criticised the council's failure to prevent a company it set up to run 12 old people's homes running up losses worth more than £2 million in the past two years. Auditor Paul Griffiths said his public interest report was prompted by the council's decision to provide an extra £523,000 this year to the company, Tameside Enterprises Ltd, to help offset the losses. The company was set up in 1985 primarily to build housing and restructured in 1990 to exploit government social security payments which are only available to private residential homes. The report questioned the appointment of representatives of the local Labour party as directors of TEL in a public interest report published on Monday.
'The directors seem to have given little consideration to the financial and managerial skills required. While I have found no evidence to suggest that council members acted other than in a proper manner, I am surprised they did not foresee the impact such actions would have on the public's perception of the scheme'.
Senior council officers and members were also employed by the company which Mr Griffiths acknowledges provides a high standard of care for its residents. TEL made a profit of more than £81,000 in 1990-91 but these turned into losses of more than £1m in 1991-92 and 1992-93. Research by LGC shows that the company's refurbishment budget for the homes was £450,000 but it actually spent £900,000. A single contract for recarpeting was let without competitive tenders for £446,000 to 'an acquaintance of Mr Stonier', a source told LGC. Mr Griffiths recommends the council severs any links between council members and the company which give the impression that TEL is not independent of Tameside.