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Scottish secretary Donald Dewar confirmed that two more councils - Argyll and Bute and East Dunbartonshire - have r...
Scottish secretary Donald Dewar confirmed that two more councils - Argyll and Bute and East Dunbartonshire - have reported deficits, although it had not yet been established if they amounted to unexplained 'black holes'.

The Guardian (p14) reports that, following revelations about a£4.8m hole in the accounts of North Lanarkshire Council, all authorities will be warned that they risk losing substantial powers to a new Edinburgh parliament unless they stem huge losses and meet strict performance targets.

In the commons yesterday the prime minister was challenged by William Hague over Labour's record of 'spectacular mismanagement' in local government in Scotland.

Calling for an independent inquiry into the 'crisis', Mr Hague claimed that Labour had failed to act. But Mr Blair said an independent inquiry was already underway, while there had still been no response from the Conservative party over the Westminster City Council homes-for-votes scandal.

Mr Dewar said last night that the Accounts Commission for Scotland would be asked to investigate the management and financial controls of all direct labour organisations, and government sources said this action could be far more sweeping than initially envisaged. Wide-ranging powers will allow ministers, or the Scottish parliament, to take over local services if performance targets are not met.

Meanwhile, The Telegraph (p1) reports that a lollipop man at North Lanarkshire Council earned the equivalent of£17,500 a year for spending 10 hours a week helping schoolchildren cross the road.

John Gillen said he was paid£370 a week for five two-hour shifts after he and fellow labourers were brought in as cover because of a shortage of casual lollipop men.

A council spokesman said: 'We cannot pay somebody less than they are normally paid. These men were required to return to whatever depot they were working from for other duties when they were not involved in patrols.'

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