Finance hit squad moves in to save crisis-ridden Hackney.

A financial hit squad has been sent in to help run Hackney council amid threats of a direct takeover by the government.

Seven temporary financial managers, appointed by Deloitte & Touche, will tackle the London borough’s financial crisis alongside acting finance chief Anna Klonowski.

The move forms part of a support package for Hackney, paid for by the Department of Environment, Transport and Regions, the first time a local authority has received such help. The managers, likely to be drawn initially from D&T, will have direct responsibility for the council’s directorates, including social services, education and housing.

Staff went on strike this week over council plans to scrap overtime bonuses as part of its financial reorganisation.

The crisis at Hackney came to light last summer when a new management team led by managing director Max Collier discovered a #40m deficit. Following a damning Audit Commission report, a full recovery package was agreed last December between the council and the government.

But local government minister Hilary Armstrong insisted: ‘We will not hesitate to intervene directly to tackle the failure. However, where possible we are keen to broker this kind of collaborative approach which will give Hackney the opportunity to manage its own future,’ Armstrong added.

A spokesperson for Deloittes said: ‘Details need to be finalised, but it is likely that the interim managers will come from within the firm.’

The firm will also look to recruit permanent staff and manage the transition period.

For further stories on Hackney’s financial crisis go to www.accountancyage.com/ Public+Services/1113967.