Labour in fresh party funding row

9.00.31am UTC (GMT +0000) Sat 25th Nov 2006

Labour in the red

The Labour Party has been accused of using councillors' allowances to help pay off party debts. A leaked memo shows funds are being sent to Labour Party headquarters rather than to fund local party activities. The Standards Board for England said it had received a complaint from an ex-Labour councillor and Northumbria Police have also confirmed they have received a complaint from a former leader of Sunderland Council, Bryn Sidaway, who quit in protest at the levy. Mr Sidaway said that that he was threatened with disciplinary action for refusing to give 3% of his £7,106 allowance - about £215. It's an imposition of the worst kind and it's all about cash to fund what is basically mismanagement of Labour Party funds."

Many Lib Dem councillors contribute part of their allowances to their local party's funds but this is voluntary. The Liberal Democrats say allowances are paid to reimburse councillors for the time and expenses involved in carrying out duties and it was up to councillors to decide what they do with it, including whether it goes to the local or national party. Labour is different because it uses the council payroll to deduct levies at source and councillors face expulsion from their local Labour group if they refuse to pay.