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Budget fears spark spending freeze

Jan 31 2006

By Greg Truscott


A FREEZE on all non-essential expenditure has been imposed at a council to cap a potential budget overspend of more than £11million.

The South London Press has obtained a leaked internal memo from Lambeth's director of finance to departmental heads instructing them to freeze all non-essential expenditure to reduce a forecast budget overspend of up to £11.5million.

The memo also orders directors of the council's departments, such as housing and social services, to freeze staff recruitment to permanent positions to save cash.

It reads: "On January 10, 2006, SMB [Strategic Management Board] agreed to a freeze on non-essential expenditure. This is a regrettable but necessary response to the continuing financial position faced by the council.

"As at November 30, 2005, departments reported an anticipated overspend of £5.7million in the most likely case, ranging up to £11.5million in the worst-case.

"The reality is that this position is simply unsustainable for the council.

"The board agreed to a freeze on all non-essential expenditure, at least for a couple of months into the year."

Lambeth's Labour opposition has accused the borough's Liberal Democrat and Conservative-run administration of poor financial management.

Opposition finance spokesman Councillor Dan Sabbagh said: "This secret document revealed by the South London Press shows that the Liberals are unable to manage Lambeth's finances.

"The freeze on expenditure and recruitment is a classic admission that the situation is running out of control.

"It comes on top of the £3million housing benefit fraud and a £12million write-off following a bungled debt repayment. Lambeth residents won't be able to afford this for much longer."

Lambeth's executive member for finance, Liberal Democrat councillor Ashley Lumsden, dismissed Cllr Sabbagh's claims.

He said: "This is part of our tough approach to reducing bureaucracy, which has already saved the council over £5million this year.

"The public expect us to manage their money carefully and make sure that the books balance at the end of the year. We don't expect any of the council's frontline services to be affected by this freeze."


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