The Mis-management of Labour Councils.
Inquiry into councils'
lost millions (3rd June 1998)
Donald Dewar, the
Scottish Secretary, last night attempted to defuse growing concern over financial
ineptitude and alleged impropriety at Labour-run councils by ordering an
investigation into the direct labour organisations of all 32 local authorities north of
the border. The move follows the disclosure of multi-million-pound budget deficits
at two Labour-controlled authorities in Scotland, which have prompted new allegations of
"sleaze" from the Government's political opponents.
It emerged that East Ayrshire council had begun an internal investigation into a £2.9 million shortfall in the authority's accounts. Two senior officials have been suspended on full pay.
Earlier, three officials at North Lanarkshire council were suspended after independent auditors found a £4.8 million deficit in its accounts. The money is missing from its direct labour organisation (DLO), which could be forced to close, threatening 1,600 jobs.
Price Waterhouse, the external auditor which examined North Lanarkshire's accounts, found that the system of "exceptionally high" bonus and overtime payments enabling a plumber to increase his basic salary of £10,600 to £54,000 was a significant factor in the deficit.
There have been claims that up to 200 workers in North Lanarkshire's direct labour organisation earned more than £20,000 a year, well above basic pay. A chargehand on basic pay of £12,200 could earn £41,700, while an advanced scaffolder on £9,900 could earn £32,900. Workers are said to drive expensive cars. One has been seen leaving the council's headquarters in a BMW with a personalised registration plate.
Mr Robertson said: "Councillors cannot be allowed to wriggle off the hook as clearly they are intent on doing, leaving officials to carry this singularly unsavoury can. As elected representatives they have clearly failed to monitor the activities of departments funded by huge amounts of public money and their immediate suspension looks like the only successful way forward."