Mike Freer and The Economics of the Looney bin

It looks like Barnet Council are planning to raise Council Taxes by 2.81%. It would be higher, but they've decided to plunder the reserves. Those of you who remember the Tories election in Barnet in 2002, will remember the 26% tax hike that followed.
This rise was supposedly to plug a hole left by the outgoing Lib/Lab administration in the reserves. Whilst I disagree with the Tories about many things, I had a grudging admiration for their abandonment of the manifesto commitment to low Council Taxes to fix a big problem with a politically unpopular measure. It seemed to me that the then Leader Victor Lyon was probably quite a sensible if rather unimaginative chap.

Six years and two leaders later, we have Mike Freer. Now Mike has a different view of financial planning. He increased council borrowing by nearly 8 times, because it was supposedly cheap and "everyone" new interest rates would go up. Guess what? His punt failed and they've gone down. This means that the Council will have to find an extra Million a year to plug the hole. He also decided to put £28.6 Million of the borrowed cash in Icelandic banks, because "no one" thought they'd go bust. So we've borrowed cash and now we can't find it. There's a good chance that it's gone forever. We'll have to find £28.6 million from somewhere? Then there's the Aerodrome Road bridge project. Rumours abound that this has overrun by up to £4 million. If these are true, where will the cash come from? The reserves.

So the question is, when all these bills come in, How much will be left in the Reserves? Well the Tories claimed they needed a 26% rise to plug a £10 Million black hole. Neither Mike Freer, I or anyone else at the moment knows how much money we'll get back from Iceland, but if I was planning the finances, I'd be rather cautious. I wouldn't be subsidising the rise in taxes with the now sparse reserves.

Lets put it this way, Victor Lyon increased taxes to protect reserves in prosperous times. Mike Freer is cutting taxes and destroying reserves in times of uncertainty and unexpected financial strains. Who would you trust? Unlike Mike Freer who is hoping to move to Westminster, we'll be lumbered with the cost of his mistakes. We'll be paying with higher taxes and worse services for years. If Mike was a real leader, he'd raise taxes to protect the council finances. I suppose that when all of the cash has gone, he'll say "No one could have foreseen the fact that if you live beyond your means you end up broke".

Mike Freer has voiced the opinion that I'm a "left wing looney" to his friends (and my informants). I'll let you be the judge of who's the one whose idea of economics are criminally insane.