Hackney faces service cuts

27 Sep 01
Managers at the London Borough of Hackney have warned that the crisis-ridden authority may have to spend money it does not have to meet the government's demands.

28 September 2001

A report signed by managing director Max Caller was presented to the policy and finance executive committee on September 25.

It warns councillors that many of the orders issued by exasperated ministers from five government departments on September 18 will have resource implications.

The report contains a stark admission that services will have to be slashed to fill Hackney's financial black hole.

'Many of the directions require the council to undertake additional work in establishing new models for provision of services. This will undoubtedly incur additional expenditure,' the report says.

It goes on to express the hope that the government might be willing to foot the bill 'in whole or in part'.

But it adds: 'It needs to be made clear that in agreeing a three-year budget strategy… there will inevitably be services that will need to cease so that the council can return to financial health.' The report gives no indication of where the axe is likely to fall.

One of the contenders for the most expensive order came from Education Secretary Estelle Morris, who instructed the council to set up 'a new body' to run the education service.

The report says: 'Set-up costs, human resources, budgets, consultation, planning and implementation will need to be carefully and fully resourced. The cost of this work will need to be covered by the DfES'.

Eric Ollerenshaw, leader of the opposition Conservative group, said confusion reigned on how the directions would be implemented. He said it was unclear what Hackney was being asked to do with its education service.

'What is the body?' he asked. 'It's not clear who would be in control of the budget – the council or the new body. If it is the body, then that is effectively getting rid of the LEA.'

Ollerenshaw also expressed fears that the education service, which escaped criticism in the Audit Commission report that prompted the government's intervention, was being targeted by the government because it is a major element of the authority's budget.

'If the motive is that it's the biggest spender, then I am really worried they must expect to find savings there.'

Caller's report will form the basis of Hackney's formal response to the government's directions, which must be submitted by October 2.


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