Labour councillors have admitted they failed to have a clear process to protect taxpayers' money after it emerged yesterday that nearly £1 million of debt had to be written off following the failure of two projects.
Haringey Residential Community Interest Company, a residential lettings company also called Move 51 Degrees North, was set up by Labour in 2015 and failed a year later due to low demand.
The council provided a second project, Urban Futures, with payroll services. Under questioning from Cllr Scott Emery (LD-Muswell Hill), the Labour Cabinet Member for Finance confessed that there had been no system in place at the time to ensure that costs incurred by Urban Futures were paid to the council up-front. Instead, over a number of years, taxpayers’ money was spent with no guarantee of repayment.
These debt write-offs were part of a wider decision made yesterday to write off £17 million of bad debt.
Cllr Paul Dennison (LD – Highgate), Haringey Liberal Democrat spokesperson for Finance, Business and Local Investment, said:
“This is a scandalous waste of taxpayers' money. Labour have wasted millions of pounds over the years on hare-brained schemes that have failed - we all remember the £340,000 used to open a fried chicken restaurant.
“It beggars belief that the council would use taxpayers' money to pay a company’s payroll without a cast iron guarantee that the company would pay them back.”
- Link to the Cabinet documentation from 9th March 2021 - Agenda Document for Cabinet, 09/03/2021 p.66
- Homes for Haringey Residential Community Interest Company (Company No. 09543450) Trading as Move 51 Degrees North - £302,500.00 debt written-off
- Urban Futures in Voluntary Liquidation - £618,416.94 debt written off