Lib Dems: tackling fraud in Lambeth

12.08.11am GMT Mon 6th Mar 2006

There's been much publicity over the last few months about the £3 million fraud committed by a professional fraudster in the Housing Department of Lambeth Council. Since the fraud was uncovered in July 2005 tough action has been taken to bring the culprit to justice, recover money stolen and ensure that it is much more difficult to defraud Lambeth in the future.

As reported by the South London Press (24th February 2006) the alleged fraudster was arrested in Hampshire on 22nd February and has been questioned about the offence. Police are continuing their investigations.

Lib Dems made sure that Lambeth Council got a court order freezing assets, and so far around £2 million in recoverable assets has been identified. A further court order in December 2005 gave Lambeth the go-ahead to start recovering what it can from these assets.

For the first time anyone can remember, Lambeth Council brought in a senior officer (from Westminster Council) to lead a disciplinary investigation into whether staff had done or not done anything that allowed the fraud to proceed. As a result of this investigation a number of housing officers were suspended pending the outcome of the disciplinary hearings - which have now started.

An independent report was commissioned by Lib Dem councillors in August 2005 into why the fraud had been able to work. The report, received in November, explained that although "Lambeth has robust procurement procedures in place, which essentially meet public sector best practice" there had been "non-compliance with specific controls...". In other words, Lambeth's procedures had not been followed. The report also recommended changes the Council could make to procedures to ensure such a fraud could not take place again.