Labour Councillors demand action after City finance "road crash"

27 February 2009

Cambridge Labour Councillors challenged the financial incompetence of the ruling Liberal Democrats at the annual budget meeting of the City Council. The result of the Lib Dems being "asleep at the wheel" was the city's finances suffering a "catastrophic road crash", argued Cllr Lewis Herbert.

The two self-inflicted finanical losses saw over £10 million wiped from the city's coffers in a matter of months. You would think such massive blows to the city's finances would chasten the Lib Dems, but instead their irresponsibility continues with claims that the problems are not serious. Not only are they serious, they look to be ongoing as, in a desperate attempt to justify their budget, problems are being put off for future years.

Labour's alternative budget for Cambridge included tougher financial scrutiny, lower council tax, efficiency reviews to cut costs without cutting services and service quality reviews to improve underperforming council services like street cleansing and swimming pools. Cllr Herbert said:

"The Liberal Democrats running the council were asleep at the wheel while the Council lost over £10,000,000 in 2008 in two massive and self-inflicted financial errors - financial incompetence on the scale of a catastrophic road crash.

"Unlike the ruling group, we cannot agree that this crash is somehow damage-free. Their inaction since, and total failure to radically improve financial scrutiny amounts to recklessness. We are not prepared to see the council take on more and more debt, impose a council tax increase double the rate of inflation, or saddle the future city budget problems like an emergency £1 million loan, particularly as the City Council had a massive £80m in total reserves, and £14m in ready balances only a year ago."

As we are all painfully aware, the loss of £9.5m in deposits and interest in Icelandic bank Landsbanki (and its subsidiary) was compounded by another £618,000 in missing Folk Festival ticket sales. This was because of an uncontrolled contract with a company that took the council's money and never made any effort to pay it back. These are massive sums for a small council with core annual spending of about £20m.

Labour Councillors are also demanding a full council statement on both the Folk Fetival and Icelandic losses and whether any effective action has been taken to recover over £10,000,000 that belongs to Cambridge residents.

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