AN INQUIRY has revealed a staggering £27m of “toxic debt” was allowed to build up in Wirral Council’s adult social services department.

A report by an independent consultant has exposed the true extent of bad debt amassed in the department.

It says that "years of neglect" saw the debt growing to massive proportions and brands a lack of action to tackle it as “corporate failure.”

Council leader Phil Davies admitted mistakes have been made.

Whistleblower Martin Morton claims he raised fears of the department's debt build-up many years ago and was ignored. Martin's full statement can be found at the end of this story.

The review says only £14.8m will be collectable and recommends writing off more than £10m.

Much of the debt relates to non-collection of rents in residential and care homes.

Financial expert Eugene Sullivan’s report will be presented to cabinet councillors next week and discloses that over years, chief officers in DASS - as well as the council's legal and finance departments - were aware of the growing problem of “aged debt”.

He writes: “There has been a corporate failure to understand the scale and consequence of this issue.

“None of the departments has taken effective action to ensure this matter was addressed.

“It should have been recognised as a serious corporate risk which was not being mitigated.

“It had gone on for so long, and become so big and complicated, no one seemed to know how to address it or who should take ownership for addressing it.”

Mr Sullivan also reveals: "It has been put to me that this is due to a lack of resources.

"However I find it hard to understand how chief officers failed to recognise the obvious conclusion that the situation would only get worse unless they a) introduced effective collection and recovery procedures and b) dealt with the legacy of years of neglect.

"Belatedly, this is now happening."

The report goes on to say that by April of this year, steps taken by the authority have reduced the debt by £15m.

Action is ongoing to try to further reduce the debt.

Councillor Davies said: “Eugene Sullivan identified some pretty poor practices in the way we dealt with debt, particularly in adult social services.

“This report about acknowledging the fact that we got it wrong.

“We first became aware of the bad debt in November and that’s when we brought in Eugene to independently assess the problem.

“As leader I’ll be asking the chief executive and director of finance to compile regular reports on the debt that is collected; we should be able to collect a further £5.2m of this debt in the coming months.

“As that debt is collected, we will report to elected officers.

“It is vital that we avoid making the same mistakes in future.”

Whistleblower’s Blast:

Former social services manager turned whistleblower Martin Morton - who first lifted the lid on malpractice by exposing a “special policy” of overcharging care home residents - claims those mistakes could have been avoided in the first place if he'd been listened to.

His revelations – exposed exclusively in the Globe – led to the damning £250,000 Anna Klonowski investigation which set a bombshell under Wirral Council and led to a massive shake-up in the way the authority is run.

Mr Morton said today: “I made repeated claims of financial mismanagement and gross maladministration throughout my whistleblowing allegations made between 2006 to 2011, and specifically in correspondence in 2007.

“These aspects of my whistleblowing were woefully addressed in the independent review undertaken by Anna Klonowski.

“Of course, rather than address the issues I raised, I was subsequently mobbed by many of those implicated in Mr Sullivan's report.

“The first thing Ms Klonowski asked me during the independent review was what outcome I wanted from the investigation.

"I replied: 'Justice.'

“However, I now find my life is in ruins and those implicated in incompetence are either still working for the council or have been rewarded for catastrophic failure with public money.

“I can only hope this report is the catalyst for the Wirral public to realise that they're losing services because of this gross financial mismanagement and what amounts to a complete failure of corporate governance.

“Justice? What justice?”

Mr Morton was driven out of his job in 2008 and agreed to sign a compromise agreement preventing him from exposing DASS's failings to the press.

Happily he decided to break this arrangement and came to the Globe; we have helped him tell his story ever since.