A Tynwald committee’s investigation has concluded that taxpayers’ cash was not squandered over a Douglas care home.

The public accounts committee found mistakes were made over Salisbury Street nursing home but its purchase by government for £7.9m was the right decision.

However, it also found that the Department of Health and Social Care had acted outside its powers which could have led to a potential £600,000 loss.

The PAC inquiry was launched following allegations made by David Murray, a former director of the firm selling the home, and director of the private company contracted to run it.

Mr Murray claimed government paid over the odds for the development which he said cost between £5.3m and £5.6m to build.

He also claimed the taxpayer was paying twice for beds.

As part of the contract awarded to Adorn Domiciliary Care, 40 of the 68 beds were to be made available to those solely reliant on state benefits to fund their nursing care costs. The move was designed to tackle an issue of bed-blocking at Noble’s Hospital.

Mr Murray claimed in the event very few of people in this category came in and yet the taxpayer was still paying £812.10 a week per bed whether they were full or not.

The PAC report concludes: ’We have concluded that buying Salisbury Street represented the right decision, both at the time and with hindsight.’We have considered the cost of purchase and the economics of block booking beds. The purchase price was eminently justifiable. The economics of block booking beds is not straightforward, but we have not identified any long-term risk to the public purse as a result.’

The committee found that there were some mistakes made, some elements of the deal were misunderstood, there was some unfortunate timing, and there was some inappropriate conduct by department staff in dealings with Mr Murray.

Its reports adds: ’We note with concern that the department in conjunction with Treasury acted outside of vires leading to a potential loss to the taxpayer in excess of £600,000, split almost evenly between paying for empty beds and paying twice through benefits.’

The committee said the loss of income, due to the issues regarding charging and the benefit payment offsetting process, was avoidable but once identified, the required amendments to legislation were made with reasonable expediency.

It also raised concerns that government has commissioned the building of a similarly sized care home on the former Glenside site on Victoria Road, which appears to be costing twice as much as it would for a private developer.