Auditor attacks council's spending

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A LONDON council was lambasted yesterday for waste and financial mismanagement in almost every department for years and for unlawfully spending more than pounds 20m on roads contracts without inviting competitive tenders.

In a damning report published yesterday, Paul Claydon, the district auditor, said the failings included:

Not complying with the law;

Unnecessary expenditure and waste;

Poor value for money;

Inadequate accounts;

Failures in stewardship of public money;

Overpayment of staff wages.

The council had overpaid teachers transferred after the abolition of the Inner London Education Authority. One had been put on a weekly and a monthly payroll and been overpaid by pounds 10,000. When the mistake was discovered the council offered the teacher 15 years to repay the money. Although the error was discovered in June 1991, only pounds 30 has been repaid.

The report concentrates much of its criticism on Lambeth's highways maintenance department. In one case, a costing by the direct labour organisation was reduced after a private contractor submitted the lowest tender.

The auditor is to interview more past and present staff. If a High Court declaration is obtained, attempts could be made to recover money from individuals, although the auditor has refused to name those involved.

Michael Howard, Secretary of State for the Environment, has served notices on the council requiring it to provide information about its direct works department. He can order the council to stop work on contracts.

In January, Herman Ouseley, Lambeth's chief executive, produced a report criticising highways work done without authority, and breaching planning law. The council set up an independent inquiry which is being conducted by Elizabeth Appleby QC.

Simon Hughes, Liberal Democrat MP for Southwark and Bermondsey, said: 'The people of Lambeth are regularly required by the council to obey the law. Yet pounds 20m has been spent illegally by the authority itself where not a penny can afford to be wasted.'

Lambeth said it was working closely with the district auditor on many of the matters in the report. Many problems had been identified in the Ouseley report.

Catalogue of fraud, page 2