With the fifth highest population density in the country, the London Borough of Lambeth has been one of the most problematic.
Exceptional problems relating to crime, income deprivation and unemployment afflict the borough, whose residents have divergent needs and expectations.
Lambeth is expected to deliver a quality service in hundreds of important areas, ranging from housing to social provision. The borough’s finances have to be in sound shape if these objectives are to be achieved.
The 2002/03 budget did not make for happy reading. The borough had failed to provide for £21m of bad debt, street lighting and CCTV cameras were underfunded, and nothing had been done to replace the pension fund hole created by the council taking an eight-year pension holiday from 1986.
In addition, a general fund deficit of £28m was reflected in the 2001/02 accounts, along with long-term debt of £850m. The qualified accounts included seven s11s, expressions of serious district audit concern.
The appointment in March 2003 of a new executive director of finance, Richard Ennis, combined with the recruitment of a motivated team of committed permanent assistant directors of finance, kick-started the transformation of Lambeth’s financial health.
Ennis involved staff in preparing an analysis of the department’s strengths and weaknesses. The financial management crisis demanded a dynamic service plan to cover a range of issues, including strengthening financial management performance, establishing a medium-term financial strategy and implementing ICT and e-procurement strategies to achieve reductions in IT costs.
Headed by Ennis, the Lambeth finance team has transformed the council’s finances. The general fund deficit of £28m has been turned into a credit of £19m. There were no s11s in 2002/03 and Lambeth is confident this year’s accounts will have no qualifications.
Lambeth is no longer regarded as a soft touch when it comes to non-payment either, with collection of council tax reaching 89% in 2003/04. Changing the culture of non-payment has been a fundamental element of Lambeth’s recovery and key to the financial turnaround.
The 2003/04 accounts were approved on 29 July 2004, one month ahead of the statutory deadline. This was the second year in succession that Lambeth met the statutory deadline.
The government’s recognition of Lambeth’s improvement is evidenced by the approval of PFI grants to the borough. In January 2004 the government monitoring board noted approvingly that ‘Lambeth’s finances and financial management are beginning to turn around from a high-risk area to a source of strength’.
The judges agreed, heaping praise on Ennis for the turnaround: ‘He has achieved a significant turnaround in the fiscal, operational and structural health of the council. He’s developed a focused team committed to delivering results.
He’s convinced colleagues to accept change as a positive driver toward achieving overall aims. And he’s ensured the financial situation is sustainable by having a medium-term strategy.’
Richard Ennis is very motivated by the desire to make a difference to people’s lives. He has successfully risen to the challenge of running and repairing Lambeth’s finances, pulling the borough out of one of the biggest financial holes in London.
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