A postal strike was responsible for a rents fiasco where Pembrokeshire County Council lost more than £300,000 in lost revenue rather than its contracted distributor, members of a special council committee have heard.

That revenue was lost last year after council tenants’ annual rent rise was not correctly publicised by mail in the appropriate time.

Tenants have a statutory two-month period of notice before rent rises, which were due to take place from April 1, can come into effect.

However, statutory rent increase notices were only delivered to tenants in late March, delaying the time of rent increases to July 1, costing more than £300,000 in lost revenue.

Concerns had been raised that the council contracted company – Dsi Billing – which provides the printing and distribution of specialist documentation such as council tax billing, rents and debts may have had a responsibility for the late delivery, which have since been refuted.

Earlier this month, Cabinet member for Corporate Finance Cllr Alec Cormack backed a recommendation to award a new £370,000 two-year contract to Dsi Billing, which is used by other local authorities including Carmarthenshire.

A report recommending approval said: “The council had an issue with the non-delivery of rent letters earlier this year and, while an investigation found that Dsi Billing could not be held liable as the Royal Mail deliver the ‘final mile,’ processes have since been improved to lessen the risk of such an event happening again.”

Following the award of the contract, all 10 Tory county councillors submitted a ‘call-in’ on that decision, which was considered at a February extraordinary meeting of the council’s corporate overview and scrutiny committee.

Options before the committee were to either uphold it, refer it back to the Cabinet member for reconsideration, or refer it to full council.

As well as raising the issue of the lost revenue, the ‘call-in’ included: “The Welsh Conservative group believe that this decision deserves full and proper scrutiny at committee level – given its sizeable cost estimation at around £370,000.

“It is of the upmost importance that in these times of unprecedented financial challenges, with a £27.1 million funding gap to be found, and expectations that the administration will ask for a council tax increase between 15-25 per cent in the forthcoming months, that we ratify every pound spent of their money.”

Speaking at the meeting, Cllr Cormack said he had publicly signed the contract, recommended for approval by officers, to avoid any perceptions “of anything underhand”.

“As far as the officers are concerned, and I fully support the position they came to, Dsi had no liability in the issue that happened last year, Dsi and the council all thought these letters had been delivered.”

He later added: “The company didn’t fail, that is what officers’ investigations told us; they did everything they needed to get it to the Royal Mail, it was during a Royal Mail strike that it didn’t happen.

“If we felt they were liable we wouldn’t have awarded them this contract, I’m sure.”

The council’s Interim Director of Resources Paul Ashley-Jones said: “Whoever we use, the final delivery will continue to be in the hands of Royal Mail, it is my belief the Royal Mail failed us last year.”

A call by Conservative councillor Aled Thomas for the matter to be referred to full council, with sight of the actual contract, saw five votes in favour and five against.

Committee chair Cllr Mike John – who had earlier said he was not in favour of it going to full council – cast a second casting vote against, stressing he was in favour of the decision being scrutinised but not the call for it to be herd again at full council.