Crisis turns to meltdown in Housing Department

2.29.17pm BST (GMT +0100) Mon 6th Oct 2008

Lambeth Council's beleaguered Housing Department's finances are reported to be in such serious trouble that an emergency in-year rent hike of £5 a week has been sanctioned by the Labour Group running the Council. This will be in addition to the large standard rent rise increases this year and the recent 60% rises in heating bills for just six months of the current financial year.

These massive increases are expected to impact unfavourably on rent collection figures which have already slipped behind key targets set by the Council.

Much of Labour's current financial woes stem from overspends in the temporary accommodation budget that rented property from private landlords. These overspends accrued due to massively overestimating the demand at a time when it was actually falling.

Labour didn't even spot that there was a problem until the accounts were published at the year's end. This showed a whopping £6.7 million of public money had been doled out to private landlords for homeless families that didn't exist.

Within weeks even this huge sum of money was eclipsed by the news that a similar, or larger, amount could also be lost during the current financial year bringing the total overspend up to a colossal £14 million.

The latest indications are that far from being contained, these monumental losses are heading for £20 million.

And these are not the only overspends in Housing or the rest of the Council.

Labour has ignored all the warnings and ignored calls for genuine debate about the worsening financial crisis.

What is becoming clearer and clearer is that Labour's long string of spending commitments, huge overspends, employment of expensive consultants, mothballing of empty offices costing millions, lack of financial rigour and falling revenues do not stack-up. They only add up one thing - a self-induced financial meltdown.

Liberal Democrats will be demanding that services and charges for hard-pressed Lambeth residents are not compromised by Labour's reckless stewardship of public money.