Lesley Cooper, who worked with Smith at Job Centre Plus in Mansfield, told Nottingham Crown Court how he had applied for a community assistance grant in October 2006 to purchase items for Hilda Owen.

The application was successful and Smith, who is accused of battering Hilda to death sometime between the 26th February and 1st March last year, was awarded around £800.

Mrs Cooper, who personally processed the application, told the court: "About two or three weeks later I asked him what the money had been spent on and Peter told me he had not purchased anything yet.

"I asked him again a few weeks later, he again told me he was waiting before the money was spent –– I was surprised because I knew Hilda needed the help and I thought he would have purchased the items he needed, as far as I'm aware none of that money was actually spent on Hilda."

Mrs Cooper, who often socialised with Smith after work, then went on to describe how she had raised the alarm with authorities.

"I knew Hilda was living in poor conditions, her house was cold and damp. I would not have liked to think that someone I was caring for was living like that," she said.

"I knew Peter had got the grant as well as a carer allowance, I was concerned about what was going on and where the money had gone. I then called the helpline at work to raise concerns that the grant money had not been spent correctly."

The case continues.