Bad management behind 18 month payment saga which left hundreds of early years providers unpaid

An internal audit has found that bad management in children's services led to 18 months of wrong payments to Northants' early years providers.
An internal audit has found that bad management in children's services led to 18 months of wrong payments to Northants' early years providers.

Bad management was the cause of an 18-month payment problem that left hundreds of Northamptonshire nurseries and childminders facing financial hardship.

That was the finding of an internal audit report that looked into why Northamptonshire County Council had not been paying hundreds of its early years providers on time and correctly.

The report gave limited assurance that the system had been working properly and found that a change of computer system and altered payment arrangements was not behind the problem, but rather a lack of action by management was the main issue.

LGSS auditor Stephen Mangan who reported the findings to the council’s audit committee at One Angel Square, on Tuesday (June 18) said: “There was a lack of management in the early years. We have just not found any.

“We found very little evidence that management had taken action to resolve the problems.”

The issue first began in autumn 2017 when the authority brought in a new computer system and at the same time changed payments from termly to monthly.

Over the next 18 months, the authority repeatedly paid its providers wrongly, in many instances owing huge sums.

One provider was owed just under £100,000 by the authority and altogether more than 200 of the authority’s 600 early years providers were affected. The nursery owners and childminders spent many hours trying to reclaim the outstanding balances from the authority and set up a Facebook group to share stories and support each other.

Management knew of the issues and met with a provider group but no action was taken to change the processes that were leading to wrong payments, the report said.

As part of the investigations, auditors spoke to other local authorities using the same computer system who had not experienced any problems.

The audit also found that staff was checking their own work and that payments were being made manually which led to errors.

Chair of the audit committee, Bill Jessup, said: “What I find seriously shocking is the lack of management. This went wrong because of bad management.”

And Cllr Bill Parker, whose wife owns a nursery in Kettering said: “ It is unbelievable that we have gone from being an authority that has been using the right system and we are now in a situation where we looking to other councils to find out what they do. It is absolutely appalling.”

The department was overseen from summer 2016 to June last year by director of children’s services Lesley Haggar who left the authority to take up a role at Sandwell council.

The auditor said the late payment problems had now been sorted but that a manual payment system was still being used.

The authority said last month that almost all providers have now been paid what they are due.

The auditors will look at the issue again in September and report its findings.