What led to Lambeth's humiliation?

The London Borough of Lambeth has been the victim of many crude attacks over the years. Conservative Central Office and its erstwhile friends in the tabloid press used the south London council as a kind of gold standard for looniness. Whatever Liverpool and Hackney might have got up to, Lambeth would always go one better.

The report by Elizabeth Appleby QC published yesterday, will widely be seen to vindicate the name-calling and political attacks of the past 15 years. It would be difficult to exaggerate the nature of the criticisms made in the report: "an appalling financial and administrative mess"; "dishonest employees, dishonest members of the public and dishonest contractors"; mismanagement of funds"; and so on.

Remember, Ms Appleby was appointed by Lambeth itself, not by the Government or an outside agency. Rarely can a public body have organised such spectacular public humiliation for itself. Yet if the report is even half-correct (and it is worth remembering that reports of this kind are generally toned down for publication), it begs a whole range of questions.

First, why did Whitehall let Lambeth get into such a mess? Britain is a small country, where the Government has - potentially, at least - virtually limitless power. Labour would have been most unlikely to have obstructed legislation to intervene in Lambeth. Only this week, Gillian Shephard announced the takeover of a school in Hackney. How much greater was the case to move in to sort out this most disorderly of boroughs.

The truth is that chaos and mayhem in Lambeth suited the Tories. Year after year, the party and the press have been able to mount a broad attack on Labour on the basis of a few maverick councils. It is hardly surprising that it has been Labour, rather than the Conservatives, who have in recent years been promising to intervene in failing councils.

Secondly, why did the electoral system fail? Widely reported evidence of the developing grim state of Lambeth was plain before the 1982 local elections, and certainly in 1986 and 1990. Yet it took till 1994 for the electorate to remove the ruling group's majority. Opinion polls suggest that although dislike of Lambeth was widespread before the 1990 elections, local hatred of Mrs Thatcher's government was so strong that it overrode suspicion about the council. Mid-term anti-government swings are clearly a dreadful impediment to effective local democracy.

In addition, throughout the Eighties, the electoral system gave Labour far more seats per vote than the other parties. In 1982, Labour won overall control while gaining six percentage points fewer in votes than the Conservatives. In 1986 and 1990, Labour's performance in Lambeth mirrored the Conservatives in national elections: 43 per cent of the vote gave them massive majority on the council.

Thirdly, how could Labour, both nationally and locally, have allowed such a grotesque mess to develop? To be fair to the national leadership, there was never much doubt they wanted to stop the politically embarrassing antics of their local government comrades. But as councillors were armed with local mandates, it proved difficult to argue them away from their high-profile anti-Thatcher policies.

Only the growing realisation that Lambeth-style behaviour was losing Labour votes - particularly in London local elections - led to local counter- revolutions. Many Labour councils have radically changed themselves from within. Southwark, Manchester and Camden have all shifted right back to Blairite moderation, away from previous positions well on the way to the dire condition of Lambeth.

The Appleby report is equivocal on whether Lambeth can recover: "Lambeth seems intent on living in the past ... Unless Lambeth turns its time and attention to the future, the much needed improvements will never come about."

Much store is set in the report on giving the new chief executive, Heather Rabatts, a virtually free hand in changing much of the existing management. Sackings will be inevitable. Elected members have been warned to put their own house in order. If Lambeth is retrieved, it will create an all-time great management text.

The writer is director of a research centre at the London School of Economics.