AUDITORS have criticised council handling of a £4million fund to promote new housing schemes in Dorset.

No decision have been made public about how to use the fund – more than eight months after Dorset Council took control of it.

An audit report says there has been a series of errors, including approvals which were gained retrospectively, during the course of Homes Dorset Ltd being set up.

It also says that the business plan for the limited company was not presented to previous district councillors, who set it up, and has not yet been considered by Dorset Council.

The auditors are also questioning whether the company, wholly owned by Dorset Council, should continue in its present form.

Council leader Cllr Spencer Flower said that despite the criticism there is on-going work taking place behind the scenes under the chairmanship of Cllr Graham Carr-Jones to decide how best to use the fund, gifted to the new council by the defunct West Dorset District Council. He says that proposals will be brought forward as soon as possible.

The fund was established before West Dorset District Council was disbanded to pay for new housing projects across the Dorset Council area.

An auditor’s report, presented to councillors, says that Dorset Council is now wholly the owner and sole shareholder of the fund with Cllr Carr-Jones and senior council officer John Sellgren named as directors at Companies House.

The report says: “The process that was followed in the formation of Homes Dorset Ltd included a number of errors and instances where approval was obtained retrospectively leading to a governance structure that is not as robust as it could be, resulting in Dorset Council as sole shareholder, not retaining a sufficient level of control over the operations of Homes Dorset. It is understood that the business plan, which was drawn up following the formation of the company, has never been presented to West Dorset District Council (WDDC) members prior to local government reorganisation (LGR), or to Dorset Council (DC) post local government reorganisation.”

The auditors say that a number of their recommendations to strengthening controls have not yet been acted on, including consideration of whether the company should continue in its present form.

The report says that 10 recommendations were made in total, three classed as major and three as minor. The auditors say they will be undertaking a follow up audit to check that the council has acted on the advice.

Weymouth councillor Cllr David Gray has urged the council to get on and use the £4m to help local people with affordable housing. “Let’s do something with it …Has it actually done anything, built anything?” he said.

Cllr Bill Pipe said the plans for using the fund had not been presented to any council for adoption – “How much has been spent by it? It’s done nothing,” he said.

Companies House shows only £200,000 in the Homes Dorset account, the rest of the money having yet to be transferred from the previous West Dorset District Council account into Dorset Council’s bank.