A MOTHERS and toddlers group has had to cancel its Christmas party because a grant approved six months ago remains unpaid.

And the reasons have raised concerns about the management of local forums with £200,000 each to spend.

Cann Hall Under Fives (U5) Action Group, Leytonstone, applied to its local neighbourhood forum for more than £23,000 to supply a creche, including £200 for a Christmas party.

But despite the unanimous backing of the forum in June, Waltham Forest Council still cannot give a firm date for payment.

Local children in one of the most deprived wards in London will now have to go without, said mum-of-three Sharon O'Callaghan.

She said: "We are very angry. We have been going for 20 years and this money would provide the only opportunity for young children to mix with each other and give parents some time off there is nothing else here."

She has raised serious concerns about the way the forums have been run by the council.

Neighbourhood forums were established three years ago under the Government's Neighbourhood Renewal Fund which targeted 88 local authorities in England according to levels of deprivation.

Waltham Forest received £2.55m from the fund for 2004/2005 of which its five forums Leyton, Higham Hill, Cann Hall, Cathall and Lea Bridge each received £200,000.

The idea is that local people could propose and support projects with the council ensuring the cash would be used for what it was granted for.

But with just four months until the end of the financial year Cann Hall Forum has paid out just £25,434 of its £200,000 allocation.

Mrs O'Callaghan said the council had been incompetent. The forum itself has expressed concern over a conflict of interest involving a council officer.

Sitting in private at a technical panel, the council decided the U5 action group should not get the cash because it was not registered by Ofsted.

But as the creche would operate only two hours a day, three days a week from Jenny Hammond Primary School, Cann Hall Road, it did not need to be registered.

After an investigation, head of the early years section Mary O' Reilly wrote to Mrs O'Callaghan in September apologising for the mistake.

Her apology came a month after forum complaints of a conflict of interest concerning a council officer who sat on the technical panel that refused the action group and then submitted a £5,525 bid for a council project he was involved with.

At last week's Cann Hall forum meeting, chairman Nick Tiratsoo, a local resident and volunteer, said the council had employed consultants to review the way the scheme was being run.

They have completed a report and have been employed to implement its findings, although the council has refused to show the document to the forums. The meeting resolved to insist those findings are made available.

In the meantime, the U5 action group has had to fill in another more complicated form and is still waiting to be told when it will get the cash.

The council said a wide ranging review of its management of forums had been conducted but a press release made no mention of who conducted the survey and why forums were not being told the findings.

And there was no response about the alleged conflict of interest.

The council said that recommendations from the forums were being assessed to ensure that they met financial and performance criteria, including providing value for money.

A spokesman said: "Cann Hall U5 project is currently undergoing a financial and performance assessment, as are all other provider proposals.

"The situation regarding Ofsted status for this project was part of a different earlier technical assessment exercise around all projects associated with children and young people. This was carried out by a panel of practitioners involved in that field, including members of the council's staff.

"It has no bearing on the current assessment around finance and performance that is being carried out across all projects."