Missed Payments Nearly Drove Local Nursery Under Says Owner

Wandsworth Council forced to apologise for blunders

Wandsworth Town Hall

November 22, 2022

A woman is claiming she was forced to borrow from family and friends to keep her nursery afloat after Wandsworth Council delayed making funding payments. The local authority has been forced to apologise for making blunders with the payments after a probe by the local government watchdog.

The unnamed woman, known only as Miss X, said staff even resigned from the nursery due to late payments. A report from the Local Government and Social Care Ombudsman said being without “large sums of money” had caused Miss X uncertainty.

In December 2020, the council overpaid Miss X £10,000 due to a human error in compiling the spreadsheet for calculating payments. The council told her she would need to repay the cash and agreed to carry the debt over to the next financial year.

But then the authority made two late and inaccurate payments to Miss X after December 2020 – including paying £1,353.98 in funding for one child’s place seven weeks late. The council also allocated some children the wrong funding codes for the forecast payment for Spring 2022, meaning Miss X was paid more than 50 per cent of her entitlement – £5,673.21 – a week late.

The report reads, “When I spoke to Miss X, she explained she had borrowed from family and friends when payments were made late, and she incurred daily interest charges on her business overdraft which was eventually revoked due to late payments. Miss X also says she incurred recruitment costs when staff resigned because of late payments.”

The report also says, “This is fault and caused Miss X an injustice as she had to chase the council on each occasion to establish exactly what was owed before it was paid. Being without large sums of money would have caused further uncertainty for Miss X.”

It adds, “Miss X has said these late payments also meant she relied on her overdraft and incurred daily interest charges. However, Miss X still had the benefit of the December 2020 overpayment during these periods. This reduced the impact of any late payment. Therefore, I do not find the council responsible for additional daily interest charges.

“I also could not say Miss X’s staff resigned or her overdraft was withdrawn specifically because of the two late payments identified above. While these may have been a contributing factor, there are too many variables for me to say this is an injustice caused directly by the identified fault.”

The council has now apologised to Miss X and paid her £150. A spokesperson for Wandsworth Council said, “This case involved an overpayment around nursery early years funding which was followed up with some late and inaccurate payments while we were trying to recover the initial overpayment.

“At the time the council didn’t have a policy on recovering overpayments but as the ombudsman acknowledges this has been remedied and a policy is now in place. For our part we have accepted fault for the errors caused around these payments and have written a formal letter of apology to the complainant and paid her compensation of £150.”

Charlotte Lillywhite - Local Democracy Reporter