300 squatters spent 6 months in Clapham's Limerick Court, costing Lambeth Council £500k

Labour bosses face an investigation over a possible overspend of £22m in housing budgets.  Houses were left empty while the council continued to pay private landlords for their use and it regularly took six weeks for new tenants to move in once occupants had left.

FACT: In one incident 300 squatters moved into Limerick Court housing estate in Clapham for six months, costing the council an estimated £500,000.

Critically, housing officials failed to do their sums properly when the Labour government cut benefit funding.  All these factors led to a shortfall of £6 million last year but the knock on effects may bring this up to around £22 million by March 2010.

An all-party group of councillors has recommended an investigation into the possibility of fraud because private landlords were paid for houses lying empty.  Their report says they were “astounded” at the “reckless” behaviour concerning the use of private properties.

Gipsy Hill Conservative councillor Andrew Gibson says:  “Make no mistake, Lambeth taxpayers will foot the bill for Labour’s mismanagement whatever the outcome of the official inquiry.  The vast majority of tenants have completely lost faith in the Labour council.”

Labour politicians are in deep financial trouble due to a £14 million hole opening up in the Council housing accounts after officers bungled the budget for temporary accommodation for the homeless and a failure to balance the rent account.

Cllr Irene Kimm, Conservative housing spokesperson, says:  “Lambeth Housing is as bankrupt as Northern Rock was before Brown’s bail out.  Every taxpayer will pay the price of Labour incompetence, but our hard pressed tenants who are not on benefits and pay the full rent will suffer most.”

The crisis is so bad that finance officers advised Labour that if they failed to act the finance director would freeze all expenditure using government powers.  One option was to introduce an immediate £5 a week rent rise from December just in time for Christmas.

Unofficial estimates say the total bill in Lambeth for Labour’s profligacy could be as much as £22 million.  As well as hiking rents, the Council is docking the money given to tenant management organisations by a whopping £3.6 million in the next 18 months.

“Not surprisingly, no senior jobs have been cut although up to 30 middle managers will go,” says Irene Kimm

“No doubt the fat cats in the town hall will go on drawing their salaries to preside over this shambles.”