MP demands answers over 2nd multi-million pound financial mess

12.00.00am UTC (GMT +0000) Mon 4th Aug 2008

With the new Colchester Borough Council administration still reeling at discovering that an additional several millions more pounds are needed to finish the town's controversial Visual Arts Facility, it has now been revealed that there is a second blow to the Council's finances which will take the total "black hole" in the accounts to well over £10 million.

And today Town MP Bob Russell said he would be making a Freedom of Information Act request to the Council to publish all the figures.

He has already asked the Audit Commission to hold an investigation into the VAF, with a similar request made to the Department for Communities and Local Government.

The latest disclosure relates to the Council's decision to dispense with the services of property maintenance firm Inspace which had a contract to look after the Council's 5,000 dwellings. It is believed that the pay-off agreement is in excess of £4 million.

Mr Russell, said: "The financial shambles surrounding the VAF is bad enough, but to now learn that the Conservatives who ran the Council until they were defeated in the elections on 1st May had also presided over a second financial shambles involving Colchester Borough Homes makes the position of these leading Tory Councillors even more untenable.

"Quite frankly, they should resign. They have lost all creditability. They have failed the basic test of sound financial management, and as a result of their failed stewardship Colchester Council's Taxpayers have been left with a bill which I believe will rise to more than £10 million."

Liberal Democrat Mr Russell said he had made a Freedom of Information Act request because he had been told that the agreement between the Council and Inspace had a confidentiality clause which prevented the figures being published. "This has got to be challenged. We are talking here of millions of pounds of public money. The details should not be kept hidden."

He added: "I recognise that the administration which took over from the Tories in May has not only discovered the financial cupboard is bare but alongside it a second cupboard with financial skeletons in it.

"This is a total shambles, but I welcome the fact that the new administration - Liberal Democrat, Labour and Independents - are doing all they can to wrestle with the appalling mess which the Tory Councillors left."