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Stephen Byers, secretary of state for transport, local government and ...
Stephen Byers, secretary of state for transport, local government and

the regions, today announced that the government is taking action to

safeguard frontline services, such as education and social services,

for the people of Hackney and to ensure the council tackles a legacy

of financial mismanagement.

Five government departments today issued draft Directions to the

council requiring service improvements in education, social services,

waste management, and housing benefits and tough action to get the

council's budget back in balance. The council has been given 14 days

to make representations to the government.

For the first time, ministers intend to use powers in the 1999 Local

Government Act to issue Directions to safeguard council services and

ensure best value for the public.

The five Directions would require the council to:

- produce a strategy for bringing their budget into balance and an

action plan for establishing a new system of financial management

within the authority;

- recruit key staff and address any lack of skill in procurement and

contract management in certain specified areas;

- produce proposals for a review of property and accommodation


- implement plans to establish a new body to deliver the education

service in the borough;

- submit proposals for carrying out best value reviews of services

for older people and mental health services in co-operation with

the NHS;

- clear the large backlog of outstanding housing benefit and council

tax benefit work by 31 December; and

- submit a plan for improving waste management services and

recycling, agree this with the secretary of state and then

implement it.

In announcing the measures Stephen Byers secretary of state for local

government said:

'The government is simply not prepared to let the present situation

continue. It is unacceptable that people who live, or work in Hackney

should have to suffer poor services because of the council's

corporate failure. The package of measures the government is

announcing today is designed to protect and improve the key services

and ensure the council tackles its budget deficit.

'I have directed Hackney to produce a budget strategy to start the

process of getting them back into balance. My department will be

writing separately to the council about how they can continue to work

to return to financial stability, without the help of government

resources, at the earliest possible time. To assist, the council's

leadership has agreed to appoint an independent person to monitor

financial progress.

'It is now for Hackney's elected members and senior staff to ensure

that people in Hackney see very big changes. It will involve tough

decisions to tackle the years of failure and it will be painful but

the government is clear it must happen. Hackney Council cannot be

allowed to fail its people again.'

Alistair Darling, secretary of state for work and pensions said:

'Hackney's residents deserve a good quality benefits service, which

has been lacking for too long. No one should have to wait several

months for their housing and council tax benefit claims to be paid.

Poor service affects some of the most vulnerable people. It can also

affect the financial positions of Hackney's social and private


'I have therefore set Hackney a challenging direction to clear its

long-standing backlog of work by the end of this year. I shall expect

them to do this to acceptable standards and without detriment to

current and new work. My department is working closely with Hackney

and has supported them in rebuilding their benefits service. They

have made an encouraging start. The momentum must be maintained. We

shall continue to monitor the situation closely '

Estelle Morris secretary of state for education and skills said:

'This direction will enable Hackney to establish a new body to be

responsible for the management and delivery of education services in

the borough, so as to provide much needed financial and management

stability. We have already, with Hackney Council, appointed a joint

team to identify the optimum arrangements for the structure and role

of this new body. Once this team has reported at the end of September

we will support the local authority in swiftly putting in place new

arrangements, designed to promote and maintain high standards in

education for everyone in Hackney.'

Margaret Beckett secretary of state for environment, food and rural

affairs said:

'Hackney must improve their dismal recycling record and their poor

overall performance on waste collection services so that residents

get a quality service at a price they can afford. To make this happen

the council must secure the investment that this service desperately

needs, raise public awareness about the need for changes in the local

culture in the handling of waste, and ensure local people are able to

recycle their waste.'

Health minister Jacqui Smith said:

'It is vital for some of the most vulnerable people in Hackney that

social services continue to deliver and improve their services. This

direction will require Hackney Council to work with the local NHS to

review services for older people and mental health services to ensure

that they are delivering best value.

The social services inspectorate (SSI) has been working with Hackney.

We have seen some progress in social services and are keen to see

that this continues - so that the people of Hackney get the services

they need and deserve. We will maintain this support and monitor

improvements carefully.'


1. The secretary of state for transport, local government and the

regions announced on 27 June that he was minded to use his powers

of intervention in Hackney under Part I of the Local Government Act

1999 (Best Value) subject to advice from the audit commission.

After thorough inspection and investigation by the audit

commission, it became clear that the council was in serious

financial difficulties and that essential frontline services were

at risk.

2. In July, the audit commission's best value inspection service

published its report on corporate governance in Hackney. The report

concluded that the authority was in breach of its duty to provide

best value to service users under section 3 of the 1999 Act and

recommended that the secretary of state should use his intervention

powers to require the council to restore financial control and

accountability and improve the delivery of key services.

3. The Local Government Act 1999 gives the secretary of state a

wide range of intervention powers. For example, he may direct an

authority to do anything he considers is necessary or expedient to

secure its compliance with its statutory duties.

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