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LEGAL ACTION: £2.5m overpayments response approved by council

LEGAL ACTION: £2.5m overpayments response approved by council

Only £740,000 of the £2.5m overspend has been returned to the council so far

Liverpool Council has approved proposals that could eventually see it take legal action to try to claw back almost £2m that was overpaid to private care companies by mistake.

The error, which was revealed earlier this week, saw £2.5m overpaid to companies providing overnight care support for the elderly over a five year period, though some of it has been returned.

The transactions occurred between 2014 and 2019 and are now the centre of disputes between the council and a number of private companies.

An audit of the payments led to the discovery of “underpayments and other discrepancies”, complicating efforts to get the money back.

It is also feared that some care companies already under immense financial pressure could fail if forced to pay back the money.

In addition to causing immediate issues for those needing care it would also put the council at risk of breaching government legislation on care.

Only £740,000 of the £2.5m overspend has been returned to the council so far.

Speaking at a cabinet meeting this morning, cabinet member Frazer Lake said allowing officers to take legal action where appropriate was a “difficult but necessary” step.

The council will favour less extreme methods such as negotiation, conciliation, independent mediation, or arbitration and is only set to consider court action where other avenues have been exhausted.

A report to cabinet members the adult services and health direcorate found “deficiencies in its payment and control system” in 2019 which meant a range of companies were overpaid for overnight care.

The council then reached agreements with a number of the companies but remained in dispute with others.

The outstanding amount the council says it is owed by the remaining companies stands at just over £2.5m. However, there are agreements in place to recover a further £740,000, leaving £1.8m in dispute.

A report to the cabinet said: “ The council has a duty to recover as much of the £1.818m that remains in dispute as possible, and the recommendations set out in this report will support the council to do so.

“However, the council must also be mindful of its duty under the Care Act 2014 to ensure sustainability and sufficiency within the market and of the risk of creating service disruption or failure in its actions to recover the disputed sums.”


Words: Nick Tyrrell, Local Democracy Reporter

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