Police called in over council 'fraud' report

UNLAWFUL practice and possible fraud, spreading over a decade and involving millions of pounds, have been discovered at Lambeth Borough Council by its officers.

A confidential report reveals a catalogue of abuse involving civil engineering, highways, housing repairs and maintenance. Sources close to the south London council said last night that the police would be asked to investigate some of the practices uncovered.

According to the report by the chief executive, Herman Ouseley, which councillors will see this week, substantial amounts of highways work was carried out without committee authority, making the expenditure unlawful; there were significant breaches of planning legislation when up to pounds 10m was spent on roads; there were failures by some departments to comply with undertakings given to the district auditor.

The report cites 214 staff made redundant in 1991 and being given premature retirement at a cost to the council of pounds 1.8m 'without any authority at all'. Retrospective approval could not be given to much of this expenditure and 'major issues of negligence and/or wilful misconduct for individual officers arise'.

Several millions of pounds of work had been placed with sub- contractors, again without any authority. Some had not gone to the cheapest contractor and some jobs had been charged when they had not been done.

In the integrated building service there was a lack of procedures for letting and managing contracts 'and thus the opportunities for fraud are legion'.