Cambridgeshire County Council to write off £85,000 paid in advance for specialist care for 16-year-old; the company then went bust
- Credit: Archant
A company and the only one of its kind able to look after a youngster subject to specialist needs has gone bust, forcing Cambridgeshire County Council to write off an £85,000 bill.
The county council paid Thoughts for Others Ltd up front fees for three months but with nearly 10 weeks remaining, the company folded.
West Midlands based Thoughts for Others Ltd went into administration last year with a recent insolvency report showing it owed more than £1.5m.
A report to next week’s general purposes committee of the county council will seek approval to write off the bill. Councillors will be told the company’s help had been sought for a 16-year-old who was subject to a Deprivation of Liberty Safeguards (DoLS) in place. It is one of the most stringently controlled procedures that cover restraint, access to legal support and restrictions.
“Thoughts of Others was considered the only suitable provision identified as able to meet the young person’s needs at that time,” says the report.
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The provider was chosen because of a nearby school and was able to ensure the young person did not leave the care home alone.
The report says the council ordinarily pays for such provision after receipt of an invoice but in this instance the placement was deemed necessary and the provider’s terms were three months payment in advance.
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All pre-placement checks were carried out and this included a financial referencing check,” says the report. “The decision to pay three months in advance and meet supplier terms was one taken due to the high risks around the placement and the need to secure a provision that could meet the young person’s needs.
“This was an isolated case and the service is clear that payment in advance should not be agreed for future placements.”
The report adds: “All payments to the provider were stopped as soon as we were made aware of the business failure and an invoice for a period of 9.5 weeks of pre-paid service which could not now be utilised was raised.”
The council has been told by the liquidator it is unlikely to get a refund “as local authority funders are not a priority creditor” and staff wages, for instance, take precedence.
The council is being advised by its finance team to write-off £85,193.57 (including VAT) following the liquidation of the company.