A FINANCIAL blunder has cost Maidstone council around £150,000. A review of the council's finances last spring revealed that £6 million had gone astray in the previous few months.

The investigation which followed revealed a mistake in the council's handling of the Non National Domestic Rate (NNDR), a tax paid by businesses to the Government via the local authority. A decrease in the rate enabled local businesses to pay far less than originally stipulated.

But the council was unaware of the rate change and was paying the Government the higher amount. After the mistake was spotted, the Government repaid the council what it was owed but the authority cannot reclaim the £150,000 in interest it would have raised had the money been in the bank.

Bryan Cunningham, the council's director for finance and housing, said the mistake was "regrettable". He added: "It should never have happened."

He was speaking at the at the council's cabinet meeting at which members discussed a letter in which the local authority was rapped over the knuckles for its mistake by the district auditor, a Government-appointed independent auditor. In the letter, auditor Darren Wells said the local authority's accounting systems had "failed to operate satisfactorily" and its weaknesses had continued longer than anticipated.

The council blames the problems on teething trouble with a new computer system combined with a deluge of work thrust on the authority's financial department.

At the time, the council was introducing new taxation systems and was having to pay out more than expected to complete the Maidstone Millennium River Park, parts of which were wrecked by the storms of winter 2000/1.

Before the meeting, Derek Williamson, the council's corporate finance manager, said: "There was so much going on at the time and our eyes were taken off the ball." Council leader Cllr Mick Stevens (Lib Dem) told the cabinet: "We must learn from this and make sure it does not happen again."

In his letter, Mr Wells said the council's financial management was showing signs of improvement by April 2001, raising hopes that the debacle would not recur.