It has been revealed that KPMG, Haringey Council’s auditors, have served the council with an unprecedented ‘statutory recommendation’, relating to “the identification and monitoring of cost saving schemes in order to deliver financial sustainability.” The notices were issued on 18th May, but have only been made public last Friday (10th July).
Statutory recommendations are formal, legally binding notices which require a council to publicly discuss and respond to failings, and only a handful of councils have ever received one. The council’s Chief Finance Officer is obligated to respond to the statutory recommendation with plans to rectify the problems identified; with said response to be subsequently voted on by a meeting of the Full Council.
The recommendation has been made due to the fact that (quoting from KPMG’s letter): “the overall financial health of the Council has deteriorated to the point where it is no longer able to set a balanced budget without relying upon significant amounts of EFS [exceptional financial support – i.e. borrowing from central government] to fill any shortfall. The Council has not demonstrated an ability to successfully deliver relatively modest savings programmes, nor has it committed to and subsequently implemented large-scale transformational efficiency savings.”
Councillor Luke Cawley-Harrison (LD-Crouch End), Leader of the Liberal Democrats on Haringey Council, said:
“The serving of this statutory notice is a shocking indictment of Haringey’s leadership. The previous Labour administration never took Haringey’s financial challenges seriously: always believing that central government would bail them out for failure after failure. And, despite consistent warnings from the Lib Dem opposition, the Green Party barely mentioned the council’s debt in their manifesto. They are now left to pick up the pieces of Labour’s failure – on behalf of all our borough’s residents, I hope they are up to the challenge.”
