North Yorkshire County Council's home care system has been labelled 'farcical' after one of the three Harrogate providers pulled out of their contract.
The Mears Group were one of three domiciliary care companies awarded with the £2.5m contract in January 2015.
However, just over a year after working in the district, the company have decided to end their Harrogate contract with just 24 people signed up to the service.
Concerns were raised last year when the county council awarded the contracts to the Mears Group, Castlerock Recruitment and Harrogate-based Continued Care.
Until the system’s huge shake-up, more than 20 domiciliary care companies had council contracts to provide care for elderly people at home across the district.
John Kneller, owner of St Margaret’s Home Care, has criticised the new system and labelled it a ‘waste of tax-payers’ money’.
He said: “The £2.5m tender process was supposed to rejuvenate the home care business in the district and it should now be up and running.
“Unfortunately, all has not gone to plan. Nobody at the county council realised the vulnerable people they were protecting were entitled to ‘Direct Payments’.
“This meant that they had the choice of staying with their current agency, and paying for it with money they were entitled to, or moving to one of the new ones.
“Understandably, almost all preferred to stay with the people they know and trust. The system is incompetence at the highest level.”
The company said they decided to end its Harrogate area contract due to fewer people than anticipated using their service.
The Mears Group, which specialises in providing building repairs and maintenance alongside home care, have now transferred their staff, packages and clients to Castlerock Group.
Mr Kneller said he believed it was no surprise the Mears Group had struggled to perform successfully and blamed the county council’s pay rates
He said: “We refuse to work for Council rates that they pay. Their derisory fees start very encouragingly - £16 an hour is quite sensible.
“But the truth is they never give us one-hour calls, usually 30 minutes and 15 minutes. Then it’s pro-rata - £8 for 30 minutes and a ridiculous £4 for 15 minutes.
“In some areas of the country this serious underfunding has sadly resulted in ‘call cramming’, giving staff more calls than they can fit in.
“The result is poor quality of care for the most vulnerable people in our society.”
North Yorkshire County Council stressed there had been no indication of ‘call cramming’ and that there had been ‘no concerns about poor quality of care’ from the providers.
A spokesperson said: “Mears were only paid for the care they delivered during the time they held the contract to the people they supported.
“We have clear guidance on when 15 minute calls are appropriate and which activities might potentially be considered for a 15 minute call.
“We contract for few 15 minute calls and any provider can challenge a request for a 15 minute visit if they think it is not reasonable or feasible to deliver the care needed.
“At no point did Mears suggest that the contracted hourly rate was the reason for them withdrawing from providing care in Harrogate as a Framework provider.”
The county council confirmed that, due to the low demand, they will only need two contracted home care providers for the Harrogate district in future.
A spokesperson for the Mears Group said: “We have worked in partnership with the Council to ensure the safe and smooth transition of the services.”