Barnet Council and the debt time bomb waiting to explode in your wallet

In May there is a council election in Barnet. At stake is who runs the council for the next four years. Historically, most residents of London Boroughs have had little engagement with their local councils. It was just expected that Councils would do what we expect of them, such as provide school places, look after elderly, infirm and handicapped people, fix potholes in the road, collect our rubbish with the minimum of fuss, manage planning applications for the local good and run parking regimes which protect local residents and businesses.

Sadly in recent years all of this has become highly politicised. This is because some local authorities have decided that there are votes to be had in cutting council tax. There are only three ways an efficiently run Council tax can be cut. These are

1. Go into debt.
2. Cut Services.
3. Increase charges (ie Stealth taxes like parking charges and planning charges)

So what has happened in Barnet Council since the Conservatives won the council in 2002? In 2002, Council debt was £38 Million. The Conservatives claimed this was dangerously high and immediately passed a budget that lead to a huge hike in Council Tax. According to the latest accounts in 2013, the net liabilities has risen to over £707 million. It isn't getting better, in 2012 it was £674 million. If you don't believe me have a look at them yourselves http://www.barnet.gov.uk/download/downloads/id/3178/summary_of_accounts_2012-13 (check page six for these figures)

Worryingly, the net assets of the council have declined from £620 million in 2012 to £595 million in 1 year as well. So debt has spiralled up by £34 million ( only £3 million less than the total of £37 million that the Tories claimed was unsustainable in 2002, whilst losing £25 million worth of assets.

With this huge spiralling of debt and depreciation of assets, can you honestly say the Council are managing your money well?

So that is one way they've kept council tax down, but as we all know, sooner or later debts have to be paid. Have you reaped the benefits of this £679 million pound spending spree?

Then we have service cuts. Well since I started this blog, we've had cuts to sheltered housing wardens, which make the elderly and infirm vulnerable. We've had cuts to the transport services for disabled people. We've had huge scaling back of daycentre provision and we've had cuts to personal care packages. The council have been clever and have done this by outsourcing the contracts and hiding behind "contract arrangements" with these provisioners of service as an excuse.

Then there are the stealth taxes. In Barnet the worst of these is the way parking enforcement is used as a cash cow. The parking meter and the yellow line was invented to "improve traffic flow and parking space utilisation" in busy areas. Since 2012, the Conservative administration have milked this cash cow for all its worth. To escape the blame they outsourced parking control to NSL in 2011. Targets are now set for ticketing and you end up paying. There are yellow lines in some rather odd places in Barnet and restrictions in place at some rather odd times. All of these catch unsuspecting motorists.

I've monitored the council account since I started blogging in 2008. Every year the debt goes up, services are cut more and new stealth taxes are sprung on us. Every year I have conversations with local Tories where they start by saying I'm exaggerating. I then refer them to the councils own accounts. Then they say that "it would be worse under Labour". I say to them "Labour wouldn't have spent tens of millions on consultants to outsource and wouldn't have transferred assets to the private sector" to which they say "but then they would cost more". I then point out that the Conservatives refused to do a "public sector comparator" to prove this, when they were doing the One Barnet Outsourcing. I asked why they would not do this if they believed the case was proven.

I asked a senior member of the Barnet Council administration if he believed that the current level of debt was sustainable. He said yes. I asked how he could say this. He said "I've seen nothing to suggest otherwise". I asked how the council would ever pay the debt and he said "it is all being managed". But the point is that it isn't being managed. It is increasing and the asset base is shrinking. On this debt there is interest payments. At the moment, the interest rates are low. Should they rise, what happens to the debt? The stark answer is that when rates rise, we will have to pay a lot more council tax.

The stark truth is that the Barnet Conservatives have sleepwalked in, placed a timebomb under our finances and don't even know what they've done. None of them have said "is a tax cut responsible when debt is spiralling out of control". It is clear to me that the Conservatives need to be kicked out of power, for no other reason than to get some fresh blood in their ranks, who do not act like Ostriches with their heads in the sand when problems come along. If you are a Tory, you should do the local party a  favour and vote out this bunch of incompetents, to clear the way for some new blood who might actually deal with this time bomb before it blows up in all our wallets. You may think that a different administration would be less careful with your cash or your council tax may be a few pennies higher, but the truth is that this timebomb is entirely of the Conservatives own making. There is no prospect of it getting fixed until the people who caused the problem have been kicked out.

Do you really want to cast your vote for a bleaker future?

George Osborne - Not a fan of debt

Over the past eleven years, do you think Barnet has become a better or worse place to live? Is there more or less litter on the streets? Have our local politicians behaved better or worse towards us. Have those beautiful green spaces and the Barnet street scene been improved or have they been neglected? Is there more or less litter on the streets? Has it become cheaper and easier to park your car in Town centres? Is there more or less traffic on the road? Has public transport improved or deteriorated? Have the services your council provided, which you require got better or worse? Have your kids schools improved or declined?

People are always saying to me "I don't see why I should pay Council Tax, I don't use any services". Let me transport you to a parallel world. In this world, I was elected to the Council at the last election. In this parallel world I am the worlds most right wing council leader. In May 2010, I abolished the Council. In a huge experiment, I said "If people want these services, they can organise them for themselves". As a result, no one pays any council tax at all ! Sound good? So what does this mean to you?

Well lets have a look.

All of the street lights in Barnet have been switched off. At night, Barnet is completely dark !

Your bins haven't been emptied for 3 1/2 years. If you want to get rid of your rubbish, you have to pay for a private contractor to come and take it away.

The trees in your road have been left to grow wild. If they fall down, they stay where they are.

The parks have been left to grow over. Every green space in Barnet which is owned by the council is now grown over. Playing fields have been let to grow wild. There are only private sports club pitches in Barnet. All cafes in Parks have closed.

The pavements are not being swept or maintained. If rubbish builds up and the rats take residence, then that is too bad. If you trip over on a broken paving stone, too bad. You voted to abolish the council.

The roads are not gritted in winter. If they get a pothole, they fall apart. All of the pelican crossings, traffic lights and lights on road signs have been switched off. If they fall down or get vandalised, that is too bad.

Every school managed by Barnet has been flogged off. If your kids want to go to school, you have to pay to go private.

Every library would have shut its doors, along with all Council lesiure centres and other facilities.

If you are infirm, old or disabled, then you have to pay for everything out of your own savings. If you cant afford it, then you can rot. There is no council.

No elderly  people have bus passes because the Council has withdrawn from the scheme to maintain them.

If you live near a stream or on any low lying ground, your house is liable to flood when it rains, because brooks and streams are not maintaned.

There is no planning control, people can build what they like where they like. No one polices the green belt. This is now being built over at a rate unseen ever.

There is no noise or environmental control. There are now food site inspections.  There are no planning constraints so people can open up any business anywhere. If they poison you, then you can always sue them.

Most of our major charities have dramatically scaled back their operations, because their council grants have been withdrawn.

The cemeteries have been sold off and redeveloped. You can only be buried in Barnet if you can afford a premium plot. Cremations are done by private companies who are unregulated.

Of course, you may say that the scenario above is ridiculous. Well it is and it isn't. You see the council have announced that they are cutting council tax by 1%. When the Tories took over in 2002, Council borrowing/debt was £38 million. It is now over £300 million, nearly ten times higher (http://www.barnet.gov.uk/downloads/download/1230/statement_of_accounts_2012-13 ). Whilst a prudent authority would be working to reduce this, the response of the Tories is to cut council tax. They are doing this because there is an election next year. Whilst nationally, the Coalition is working to cut debt and deficit, the Barnet Tories are living in a delusional dream world, where they have mortgaged our future for their ideologically motivated ends. Sooner or later someone will have to pay for this profligate attitude to finances. This will mean that every single one of the services listed above is likely to suffer. It is unlikely, but not impossible that a council could become bankrupt, if the economic situation meant the debts couldn't be paid. If that happened, the situation mentioned above could, at least partially,
come to pass.

No one likes to pay more tax. Like you, the extra cash will come in useful, but the truth is that all we are doing is putting off the day when we have to pay. Sooner or later, the residents of Barnet will awake with a huge hangover from the Tory party. The Tories were elected in 2002 on a manifesto of sorting out the finances. As debt has risen by ten times, they have failed. Cast your mind back to 2007, when Gordon Brown was announcing he'd abolished boom and bust. We were on a debt fuelled holiday. We've spent the best part of the last five years in recession and the economy has shrunk by a huge amount because we failed to recognise the risks of debt.

I went to a council cabinet meeting and raised this issue. No one in the cabinet had an answer, other than that "the accountants had assured them that debts were managable". As we all know, the accountants at Enron and RBS told their bosses the same thing. Whatever you may think about cuts, the issue of debt is one which only a fool will ignore. To cut tax without addressing this is in my opinion a mad folly.

You can read what the local paper are saying here. Sadly the issue of council debt is not mentioned.

http://www.times-series.co.uk/news/10697154._It_is_a_huge_gamble____plans_to_lower_council_tax/