THE council faces paying out £6 million after an arbitrator ruled it owed the cash to contractors hired to improve care homes.

Catalyst had been after £16m under the terms of a contract signed in 2002 under the Lib Dem Labour coalition council, tying the council into a 15-year deal with them.

However, Fremantle Trust, which was hired to refit the homes, claimed £16m in “care fees deficit” for work done, which was disputed under the terms of the contract by the council.

An arbitrator has now ruled Barnet Council must pay £6m to the company, which will be paid out of a risk reserve account.

Councillor Sachin Rajput, who is in charge of adult social services, said the problems stemmed from the contract under the previous administration.

He added: “They stuck us with a contract that did not adapt to the changing needs of the people we serve, a bit like the recycling contract they also lumbered us with that did not allow plastic or cardboard to be collected.

“Personalised budgets are putting choice and spending power in the hands of our clients, but Labour failed to allow for this possibility in the care home contract.

“The Conservative administration has worked hard with our officers to reduce the payment they left us open to down as much as possible.”

A council spokesman said there are now negotiations ongoing with Catalyst to ensure the changing needs of older residents are met in the future.