THE Forest council is facing a barrage of questions from whistle -blower Daphne Pearson about the Community Interest Company (CIC) set up with the help of a £26,000 council loan when the futures of both the Dilke and Lydney hospitals were under threat.

Initially the not-for-profit company hoped for funding from a Social Enterprise Fund grant in order to negotiate with Gloucestershire Primary Care Trust (PTC) for Forest Health Services. Its board was agreed in November 2008.

It has never fulfilled this purpose or any other role, with the PTC arguing they needed proof of the company's structure before dealing with them –  preferring instead to run matters themselves, which is the status quo.

The grant money was not forthcoming and the council loan of £26,000 is still outstanding. 

Dr Pearson has raised the matter of the 'moribund' company with the council at several public committee meetings, seeking clarification particularly on the way the money was spent, how it will be repaid and why so far the council has not received shares in the company on behalf of the community, which was part of the initial agreement. 

Answers have been provided on the spending, says Dr Pearson, although she told the Review she was not entirely happy with some of the costings they met, which were all supplied by consultant Philip Chubb whose

chubb-hcs.co.uk describes his role in the Forest project (as a case study) as 'Interim Programme Director': £8,645 for company registration, which Dr Pearson says can cost as little as £30-£100; £6,491 for preparation of a business plan and £11,287 "to support the setting up of a board".

Mr Chubb's website details a similar task performed for Stroud District Council.

"The council has been taken to task by the Audit Commission for not handling money matters competently and providing poor value for money. It is beginning to look like another example of this," said Dr Pearson.

At last Thursday's Scrutiny Committee meeting she again put questions on the promised meeting between the company and the council scrutiny committee.  She was told there were legal considerations to meet but the shares were "in the pipeline".

However she raised a supplementary question on whether or not the company board or one or more of its members knew before securing the £26,000 from the council that the Social Enterprise Fund grant had not been approved.

"I was very surprised when Councillor Di Martin said that if her memory of events were correct, they did know this, because she was working with some of the health committees at the time and very searching questions had been asked."

The Forest of Dean Health and Social Care Community Interest Company, to give its full title, has a board of five members who it is understood each have 10 £1 shares.

CIC chairman Bill Hobman told the Review the company was set up in response to a need at the time but had been subject to changing circumstances "which happens the world over". While it was not at present functioning it remained viable should the government wish to take this avenue on health care, but he expected no action on this before an election.

The money had been provided specifically to set up the company and had therefore fulfilled its purpose – their choice of consultant on this issue had been a limited one with only Mr Chubb available at the time. While he personally thought Mr Chubb's charges appeared expensive he understood they were in line with charges paid by the NHS for this type of consultancy.

The Review asked Mr Chubb if his invoiced expenses had been itemised and whether he was working for the Stroud council at the same time that he was engaged on the Forest project.

In an emailed reply Mr Chubb stated: "My contract throughout my involvement in the development of the CIC was with the Board and I don't therefore feel that it would be appropriate for me to make any comment on its content.

"As you say, details of the proposed consultancy expenditure related to the grant from the District Council are in the public domain as they were rigorously scrutinised by the Council and the relevant sub-committees at that time, prior to the grant being formally approved."