Massive fraud scandal rocks Lambeth Liberal Democrats
September 2005

Internal fraud at Lambeth council

Almost £3million has been stolen from Lambeth’s Lib Dem-Tory run council following a massive example of internal fraud. Administrative incompetence meant a Housing Department employee was able to arrange for £2.8 million of council money paid to a company that he had set up himself. The money was supposed to pay for heating repairs for council tenants. When questions were finally asked about why the work had not been carried out, the fraudster disappeared.

Basic checks on the fraudster’s background were not made when he was employed at the council and he was even promoted, following his employment. In March 2005 he convinced his bosses to write 28 cheques to his own West Country based company.

The administrative incompetence shown by Liberal Councillors in charge of the Housing Department has lead to calls for their Executive Member to resign. Councillor Keith Fitchett, who is in charge of Housing is refusing to step down despite the fact that he has presided over one of the largest single examples of fraud in the history of Local Government.

Statement from Councillor Steve Reed, Leader of Lambeth's Labour Opposition:

"It appears our Liberal Democrat Council hired a convicted fraudster, handed him the Council's cheque book and let him sign millions of pounds over to himself without anyone checking what he was up to. As a result of this staggering incompetence, Lambeth has now lost nearly £3 million that should have been used to improve our council housing.”

“This is one of the biggest fraud cases in the history of British local government, and it's happened because the Liberal Democrats are incapable of running the Council. Lib Dem Cllr Keith Fitchett is responsible for this service.”

“It is his failed stewardship that has led to this disaster, and he must now resign. If the Liberal Democrats don't think incompetence on this scale is a resigning matter, then what on earth is?”

Read also Bungling council prompts card fraud scare.

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