here is the official press release.
PR367
17 Oct 2000
Hackney Takes Drastic Steps to Balance the Books
Hackney Council's Borough Treasurer George Jenkins has
today (17/10)
served a report under Section 114 of the Local
Government and Finance Act
1988 which prevents the Council incurring any further
expenditure until the
Full Council has considered the report.
His report forecasts that the Council's General Fund
Budget will be in the
red to the tune of up to £13m by the end of the
financial year unless it takes
steps now to curb expenditure. In addition, savings of
£4.8m are required
from the Housing Revenue Account to balance that budget.
"We knew that Hackney was facing a serious financial
position mainly
caused by escalating costs in our waste management,
revenues and
benefits, emergency accommodation and our contract with
ITNet," said Max
Caller, Hackney Council's Managing Director.
He added: "But the real story is only now unfolding and
we were left with no
choice but to issue this report to force officers to
curb expenditure who, up
to now, have failed to realise and take seriously the
situation we are in."
In a joint statement Cllrs Jules Pipe & Eric Ollerenshaw
OBE, Joint Vice
Chairs of the Council's Policy and Finance Executive
Committee said:
"Thanks to the new political stability in Hackney and a
number of new
officers, we believe we have finally got to the bottom
of the problems that
have been dogging the borough for years. This will not
be an easy time and
difficult decisions will have to be made, but we are
determined to do our
utmost to bring the Authority out of this mess whilst
protecting essential
services."
The major budget failures are:
£3m Waste Management
£3m Revenue & Benefits
£1.3m Emergency Accommodation
£0.6m Transport Services
£1m Children's placements
Although spending departments were asked to come up with
savings to
avoid this action, the proposals they devised were
either unrealistic or
optimistic and therefore, unachievable.
All staff have now been told that all expenditure,
except statutory or
contractual commitments, no matter how small, is to
cease. A five-strong
panel of the Council's most senior officers - Max Caller
(Managing Director),
Leo Boland (Deputy MD), Anna Klonowski (Acting Director
Finance &
Performance), Mary Richardson, (Director of Social
Services) and Elizabeth
Reid (Director of Education) - has been set up to
approve all future items of
expenditure.
The team will also be studying the budget savings
proposals put forward by
departments and presenting a series of savings options
for councillors to
consider, within 21 days.
Max Caller explained: "Hackney's budgets and financial
systems have, for
far too long, not been up to scratch disguising the true
problems - we are
now facing and senior managers have failed to deal with
the growing budget
problems.
"Difficult and painful decisions will be taken over the
next three weeks to
begin the process of getting this authority back on its
feet, but the majority
of Members are committed to seeing this through."
ends
Media contact: Ian Rathbone 020 8356 3433.
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