Campaigners accuse council of financial mismanagement

Lambeth council’s “new town hall” project in Brixton, the Cressingham Gardens estate it plans to demolish and rebuild, and the Carnegie library are at the centre of accusations of widespread financial mismanagement.

Lambeth People’s Audit, a group of local residents and campaigners, today (7 July) says that its investigation of council accounts – enabled by new legislation – reveals examples of building and maintenance work being billed for but not carried out and over-payment of building contractors for work on council estates.

A council spokesman said that the council’s statement of accounts for 2015/16 “were fully signed off by an independent external auditor. The external auditor has taken into account all of the issues raised in the ‘Peoples’ Audit’ and did not uphold any of the objections to the accounts”.

The campaigners say that the council was charged for repair works at Cressingham Gardens that were not carried out, was charged for repeat instances of the same repair and was also overcharged.

The group’s 12,500-word report [PDF download] makes several other accusations of mismanagement involving significant sums and suggests that there may have been price-fixing between contractors.

The audit was made possible by the 2014 Local Audit and Accountability Act which was introduced by the then Conservative Environment Secretary Eric Pickles in the coalition government when the Audit Commission that scrutinised local authorities was abolished in 2015.

It allows taxpayers to inspect local authorities’ accounts and raise objections.

The Act provides a 30-day period in which local people can inspect accounts, contracts, invoices and similar documents related to money spent or received by their local authority in a financial year.

The People’s Audit said Lambeth council’s attitude to this process was “generally obstructive” and that one member of its team received the first piece of information he had requested at 5:42pm on the final day of the inspection period.

It says its findings suggest that “local authorities facing deep cuts in central government funding should think carefully before making cuts to financial governance systems which, while politically more acceptable, perhaps, than closing a playground or library, nevertheless have far-reaching effects on residents”.

Tulse Hill resident Simon Morrow, a quantity surveyor who is director of Lambeth Peoples Audit Ltd, said: “We have unearthed evidence of extensive financial mismanagement that suggests millions of pounds of taxpayers’ money is being wasted. Lack of governance within Lambeth council appears to be systemic.”

He said that, while recognising the effect of central government cuts on local authorities, “from our own experiences of dealing with Lambeth council we knew that was not the whole story.

“That’s why we decided to investigate further. We believe ours is the most extensive use so far of citizens’ powers of scrutiny introduced when the Audit Commission was abolished.

“Lambeth describes itself as a ‘co-operative council’. In this spirit, we offered to help the council review how their contracts were operated and to help them save money.

“Our group contains some highly experienced finance professionals who could see immediately that there were some significant problems. Our input could have saved the council significant amounts of money. Sadly, our offer of help was rejected by the council.”