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Lambeth (Direct Labour Organisation)

Volume 124: debated on Thursday 17 December 1987

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To ask the Secretary of State for the Environment if, in the light of the further recent allegations of malpractice in Lambeth council's direct labour organisation and the resignation of five senior council officers, he will now disband entirely the council's direct labour organisations; and if he will make a statement.

My right hon. Friend has powers, under part III of the Local Government, Planning and Land Act 1980, to take action against direct labour organisations that fail to meet their financial targets, but not against other sorts of inefficiency or malpractice. Under those powers my right hon. Friend has directed that Lambeth borough council may not award any new major construction work to its DLO, and is considering the council's special report on financial failures on minor new construction work. The matters referred to by my hon. Friend do not relate directly to financial failures, and are, therefore, for the council's auditors and the police to deal with.