Labour to urge drive against corruption

Labour is to unveil proposals next month to combat what it fears is widespread undetected corruption in local government by giving wider powers to the watchdog district auditors.

Frank Dobson, the shadow Secretary of State for the Environment, is expected to publish a list of suggested reforms in a discussion document at the Labour Local Government conference in Brighton on 3 February. Labour believes the long investigations of allegations of gerrymandering at Westminster Council have illustrated weaknesses in the powers of district auditors.

Mr Dobson said yesterday: "The present system is not investigating authorities properly." Scandals were reported all over the country, including harbour authorities, while the investigations were often very late and did not always detect corruption, he said. The problem was that the current law only brought in the district auditor, an outside accountant, to look at the annual accounts. "You can't pick things up just going through the books," he said.

The district auditor only uses his investigative powers, at the moment, once there is evidence of serious wrongdoing, sometimes revealed from the audit, but normally by a complaint.

He is restricted to uncovering financial loss to the council. Labour is likely to look for ways to extend the role to corruption such as bribe-taking for planning permission.

Much of the onus to detect corruption is on private citizens or opposition councillors, who are given no form of public funding, legal aid, or powers to examine documents or question employees. They have to produce enough evidence to warrant an investigation by the district auditor. All the costs of the district auditors are paid by the council under investigation.

By the end of the the public inquiry held by the Westminster district auditor John Magill, into allegations that homes were unlawfully sold to potential Tory voters in key marginal wards by the Conservative-run Westminster council, the group of Labour councillors who lodged the objections expect to have run up a bill of £200,000 in legal costs.

Mr Dobson said since Mr Magill's provisional finding of gerrymandering a year ago a further 19 objections had been lodged, but not yet investigated. They alleged improper expenditure of £100m.

He called on the Secretary of State for the Environment, John Gummer, to use his powers to order an extraordinary audit of the council's finances.

Mr Dobson said the National Audit Office, which oversees district auditors, should investigate the Government's 1990 rate support grant which enabled the council, under Lady Porter, to reduce its poll tax to £195 ahead of local elections.

Issuing his provisional finding of gerrymandering exactly a year ago, Mr Magill put the cost of the alleged improper spending by the council at £21m.

The deputy leader of the council's Labour group, Peter Bradley, said since then 14 further objections had been submitted, with five more pending, which took the alleged total to more than £97m - £1,000 for each Westminster resident.

"It is a mind-boggling figure and the meter is still running. If this amount of money had gone missing in the private sector the Serious Fraud Office would be crawling all over it," he said.