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
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
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.