Cover-up as housing losses spiral to £14 million

4.04.00pm BST (GMT +0100) Tue 22nd Jul 2008

As losses spiral to more than £14 million, Lambeth's beleaguered Labour administration is engaged in a vast cover-up of the housing overspending scandal which has rocked the Council.

Liberal Democrat councillors have been attempting to discover exactly how the Council overspent by £6.5 million apparently by booking too much temporary housing for the homeless. The overspending, which represented a 60 per cent overspend on the entire housing and regeneration budget, was incredibly only discovered at the end of the 2007-08 financial year in April.

Now, Cabinet is to be told on Monday, the overspending is forecast to rocket by a further £7.6m in 2008-09.

Despite growing clamours for an open investigation, Labour councillors have vetoed Liberal Democrat demands for an urgent special Housing Scrutiny meeting.

A report, described by the council as "independent", has been carried out by the council's own finance officers after Labour Cabinet member for Finance Cllr Jim Dickson blocked proposals for an outside investigation and insisted on a private internal one. Even this heavily censored document is not not being published. It is so sensitive that Liberal Democrat leading members, who have a right to such information, are not being given a copy but are being made to read it in a Council office.

The next scheduled meeting of Housing Scrutiny due in October has been brought forward to September but the Temporary Housing Overspend will not be on the agenda - a report will simply be published in the papers.

The July Finance Review before Monday's Cabinet also reveals the Housing Revenue Account, which deals with management of Lambeth's own council housing stock, plunging into the red to the tune of £5.5m despite savage cuts and closures since Labour came into power in 2006.

"The temporary housing budget loss fiasco is a monumental Labour finance scandal, for which every council-tax payer in Lambeth will bear the consequences for many years to come," said Lib Dem finance spokesperson Cllr Gavin Dodsworth. "Residents are entitled to know the full facts of what has occurred and hold Labour councillors to account but the Cabinet are now running scared."