Government Poised To Take Over Lambeth Housing Mess

10.41.01am GMT Mon 8th Feb 2010

As Labour-Lambeth's privatised housing company Lambeth Living lurches from crisis to crisis Labour have been finally forced to admit that there's a serious risk of the Government interceding if they cannot balance the Housing Revenue Account by the end of March 2010.

Lambeth has now placed the Housing Revenue Account deficit on a Red Alert on its Risk Register. In 2008/9 the HRA was overspent by a whopping £12.2 million and is also £1.2 million adrift in the current financial year. Local Councils must balance their Housing Revenue Accounts each year by law. Lambeth failed to do so in 2008/9 and was given a special dispensation to put together an action plan to restore balances by March of this year.

Lambeth Labour Leaders then recruited local MP and former Government Housing Minister Keith Hill as Chairman of Lambeth Living in a desperate bid to sort out the mess but each week brings fresh revelations of money being wasted, budgets not being met and the funding gap widening.

Lambeth Living has ordered a stop on all but emergency housing repairs - this is set to continue until June at least. And Lambeth Living is further threatening to cut up to 130 jobs, many of them frontline, and close another two area housing offices in a desperate bid to close the budget gap.

Lambeth Council, itself in financial difficulties, cut Lambeth Living's budget by £2.3 million forcing Keith Hill to publicly criticise the move saying this would endanger meeting the 2-star Audit Commission rating by 2011 required to trigger the oft-promised Decent Homes investment.

Meanwhile, the Government has unhelpfully frozen any ALMO funding until at least 2011/12 in order to inject life into Gordon Brown's promise to build more new homes.

Lambeth Liberal Democrat Leader, Cllr Ashley Lumsden, said, "However you try to cut it, Labour has failed Council tenants big-time. They conned everyone into accepting an ALMO that few people wanted and one that has wasted colossal resources and put everyone in a far worse position than if Labour politicians down in the Town Hall had just knuckled down to the job."

Cllr Lumsden added, "Labour just wanted a easy way out from their responsibilities but they've screwed-up spectacularly and tenants and leaseholders are now suffering from huge bills and non-existent services. The really scary prospect is what Labour has in store for them after the election if they were to win it."

The revelation that the Council is now taking the risk of government takeover seriously comes a full 15 months after the Lib Dem group on Lambeth council called on the housing minister Margaret Beckett to intervene because of the crisis in Lambeth housing.

"We were rebuffed by the Minister with a lot of platitudes. Since then things have gone from bad to worse," commented Lib Dem housing spokesperson Cllr Jeremy Clyne. "Even after last year's staggering rent rise and with Lambeth tenants now paying almost the highest council rents in London the financial crisis has deepened. Housing under this Labour administration has been a tale of disaster."