Andrew De Freitas says Chris Shaw is 'in denial' about financial mess left by Labour ten years ago
FORMER North East Lincolnshire Council leader Andrew De Freitas has accused his successor Chris Shaw of being "in denial" at the financial mess left by the previous Labour administration in 2003.
Responding to claims that his Lib Dem-Tory administration had mortgaged the authority "to the hilt", Councillor De Freitas said that the £80 million borrowed between 2005 and 2008 was necessary to replenish the council's depleted reserves.
The Lib Dem group leader's comments come in the wake of claims by Councillor Shaw at last month's full council that his Lib Dem-Tory administration had been guilty of "financial incompetence" by borrowing excessive sums of money to fund an overambitious capital programme that was never fully realised.
Councillor De Freitas described the accusations as "nonsense" and added: "If his claims have any substance then I'm surprised that a number of us aren't behind bars."
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Following a meeting with chief executive Tony Hunter, he now accepts the figures quoted by Councillor Shaw were correct, but refutes the suggestion that the council had acted recklessly.
And he says the reason that the council borrowed such large sums of money was because the previous Labour administration had completely depleted the authority's general reserves.
The financial mess inherited by the coalition administration was revealed in a damning Audit Commission report in 2004, which highlighted "inadequate reserves" and "ineffective budgetary control".
NELC's own figures show that at the end of the 2002/03 financial year the council had a deficit of £2.4 million in general reserves, just £6 million in earmarked reserves, a deficit of £2 million in investments and debt of £99.1 million.
By contrast, at the end of the 2009/10 financial year, the council had £8.8 million in general reserves, £54.2 million in earmarked reserves, investments of £51 million and debt of £89.4 million.
Councillor De Freitas said: "He is suggesting the council was reckless but it wasn't being reckless. It was being responsible in recognising the need to restore its balances to create a stable financial situation for the local authority so that it could move forward.
"The council inherited by Councillor Shaw and his colleagues was in a much better place than when Labour lost office in 2003. These figures speak for themselves.
"They are proof that he is in denial."