The former leader of crisis-torn Northamptonshire County Council has admitted mistakes were made in a PFI deal which has meant up to £2m a year being paid for empty care beds.

The 25-year contract to provide care for the elderly was negotiated by the council in 2003 but it admitted this week that the centres had been operating below 30-50% occupancy for several years.

The problems with the contract emerged when a document was put to the council setting out a ‘stabilisation plan’ to deal with a £65m budget shortfall this financial year.

It includes cutting spending on agency staff and highways services and increasing council taxes.

Government-appointed commissioners were brought in to oversee the council which has twice banned new spending.

The PFI deal with private operator Shaw Healthcare paid for four specialist healthcare centres for vulnerable elderly people.

But the council said the centres were operating below capacity and it was spending between £1.5m and £2m a year on empty beds.

Mick Young, the Labour leader of the council when the deal was negotiated, said: ‘Obviously, mistakes were made around some of the details and, in hindsight, the 25-year term was a mistake, as it's impossible to predict the future.

‘It's all very well for people to turn it into a political tennis match now, but at the time the contract was signed, it was the view that this was the only thing that could be done, and it was unanimously accepted by the council.'