Hackney looks forward to further intervention

    Hackney Council has welcomed the prospect of increased
    government involvement in tackling financial management problems
    and improving services.

    This follows an Audit Commission report released last week
    recommending intervention by the Department for Transport, Local
    Government and the Regions.

    Transport, Local Government and the Regions secretary Stephen
    Byers said he would study the commission’s report before deciding
    what to do, after warning last month he was “minded” to use
    intervention powers under the Local Government Act 1999, subject to
    advice from the commission.

    Hackney Council leader Jules Pipe said: “We have the will and
    determination to tackle the problems we face. What we lack is the
    management capacity and the money required to bridge the gap in our
    budget.”

    The north east London council’s managing director, Max Caller,
    welcomed intervention based on the Audit Commission’s plan. He
    said: “The issue for us is not whether we are directed by the
    secretary of state to do these things, but how we can work together
    to achieve them.”

    Last week, the commission’s third corporate governance report
    found that despite improvements “proper levels of financial control
    and management” were not being applied across the council.

    “In short, the council is still living beyond its means,” the
    report says. The commission recommending intervention focused on
    financial control and accountability, and improving the delivery of
    key services.

    The report described the council’s asset sales programme as
    “high risk”. The programme is designed to deliver the council’s
    budget and cover forecasted overspends of between £12 million
    and £19 million. It “presents a substantial risk” to future
    financial stability, says the report.

    It also urged the council to implement the findings from a
    review of outsourcing and partnership arrangements.

    But the council claimed last week that the plans would not
    deliver the savings expected because the private sector was
    reluctant to take on extra risk without extra money, while other
    councils were unwilling to work with Hackney.

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