The chief executive of Merton Council has hit back at a damning district auditor's report which criticised the authority for paying more than £600,000 to a consultant as head of human resources.

District auditor Nick Ward launched an investigation after receiving concerns about the employment of director of Dutton Consulting Ltd, Paul Holmes, and allegations of corruption and misappropriation of funds.

No evidence of corruption or misappropriation was found but Mr Ward's report highlighted a number of concerns including lack of competitive practices and the loss off records. He also found no satisfactory reason why Mr Holmes' rate had increased three times and by 70 per cent in little more than a year, to £850 a day in April, 2000.

Mr Ward said the cost of employing a member of staff for four years would have been £350,000 and no business case had been made to explain why a consultant had been appointed instead of an employee.

But chief executive Roger Paine said while he accepted the appointment process had not been fully followed after the initial appointment, the auditors had not recognised the value the acting head of resources brought to Merton.

"I am disappointed the report had not dealt with the value to Merton Council and Merton residents of the work undertaken by the acting head of human resources during his time at Merton.

"The acting head has modernised the human resources and personnel function at Merton.

"This has already led to considerable savings and will, over the next few years, far exceed the costs associated with his appointment. This is a real investment for the future."

Mr Paine added the authority had already established a new code of practice for the employment of consultants, and this would block any gaps that may have been in the process previously.

Two of the consultancy contracts have now ended and Dutton's expires in February. A new head of resources will be appointed next year.

December 27, 2001 15:30