A council blunder saw a top job given to a contractor - eight days after officials knew him to have invoiced them for huge sums being paid into a dissolved company's bank account.

Wirral Council finance chief Shaer Halewood said appointing Stewart Halliday as corporate director for economic and housing growth on an interim basis on January 24 was an “error.”

That was despite officers being made aware on January 16 – eight days previously, that several payments since September 25, 2018 were to a firm called Forge House Associates Limited.

The firm, it was revealed last week, was partly run by Mr Halliday and, after officials Googled it, was found to be dissolved.

It’s believed once Ms Halewood and governance and assurance director Philip McCourt were made aware of the situation, Mr Halliday was dropped from the post.

But at a meeting of the council’s audit and risk management committee on Monday, the authority was asked why nobody realised "the “s*** was hitting the fan.”

Committee member Cllr Jeff Green said: “Why, if we knew about this on January 16 at a senior level as we’re being told in this report, why did the chief executive [Eric Robinson] make the appointment on January 24?

“Don’t senior officers talk to each other? Didn’t anyone warn the chief executive this was going on? It’s either he didn’t know and he should have known, or someone hasn’t bothered to tell [him] before he made this appointment.”

Fellow committee member Cllr Kathy Hodson said “alarm bells” should have been raised even earlier – in October, when there were problems with VAT numbers on invoices.

She said: “If you have a combination of changing bank details, invoices raised with no VAT number, and an invoice raised with VAT on twice, that should ring alarm bells, and so for me the investigation into this company should have started in October.”

She added: “In January, when these things were coming to light, somebody somewhere, and I’m going to slightly swear [should have realised] the s*** was hitting the fan between October and January and somebody should have told Ms Halewood what was happening.

“This is a very serious allegation because we are now looking at Wirral Council being swarmed by the HMRC, which is what they will do.”

She added: “If there’s a senior officer in the council who does not think it’s important enough to shove this up the line as quickly as possible, then they really ought not to be in their job.”

Responding to the allegations, Ms Halewood said the delay in the chief executive being made aware was because some staff involved in the process “weren’t very senior.”

She admitted it was her error.

She said: “I knew about it on January 24 and the chief executive knew about it on January 25.

"He didn’t know before and there was a gap in between finding out that the company was dissolved and me being informed. I have addressed that with various people and that won’t happen again.

“Some of the staff involved in that – some were senior, some weren’t very senior. They didn’t perhaps realise that this needed to be escalated immediately to the chief executive. And also there were issues of availability.

“It was an error of my part that my staff hadn’t informed me by that time.”

Mr McCourt said the council had been told by HMRC it escalated the situation “quicker than most organisations would”.

He said: “There is an element of disjoint between finance staff noticing there’s an issue of VAT in terms of a company and over here the chief executive making an appointment of an individual [through] payroll.”

He said the length of process spanning from January 16 to 24 had been questioned, but that “in terms of working days, it isn’t that long a period”.

He added: “This is simply [a case of] less senior staff not putting two and two together in a way that would create something as instantaneous as that. Over a short space of days, as soon as I and Ms Halewood were contacted, we very quickly organised a meeting and acted within hours of that meeting.”

In January, it was reported Mr Halliday had been dropped from taking the top housing job after concerns were raised over how he was being paid for contracting work.

Last week, it was revealed 13 invoices were paid to Mr Halliday’s firm for consultancy services, despite it being listed on Companies House as dissolved after seven of them had been made – and its registration number invalid. A total of £182,979 was paid to the firm between February 2018 and January this year.

But the document said Forge House – run by Mr Halliday and Liz Stead – was listed as dissolved by Companies House from September 25, 2018 onwards, meaning six payments were made after that date.

That was despite the pair setting up a new firm with a similar name (Forge House Associates LINCS Limited) days after dissolving the old one – but continuing to use the old name, “so as not to declare [the firm] dissolved”.

The matter was referred to HMRC, with the council also now investigating.

The report has been released after Mr Halliday arrived in Wirral having worked as a director at the City of York Council, where he was embroiled in a row over consultant payments.

According to the York Press , a confidential audit report showed serious concerns over how Mr Halliday had commissioned a consultant to carry out more than £170,000 worth of work for the council.

According to the report, there was a series of policy breaches, although auditors said there was no evidence of fraud or criminality.

A motion was passed by the committee on Monday for an extraordinary committee meeting to be held as soon as possible, to discuss the points raised by the investigation.