Havering's Strategy Director Kathy Freeman stated: "We are very close to issuing a section 114, [bankruptcy] even six months away from this happening. Our average resources cannot meet the financial requirements.1
In 2010 Conservative chancellor, George Osborne,2 (see addendum) began his attack on local government. Without profiling the financial needs of local government, he capped Council Tax increases to zero%.
Instantly, he demonstrated he didn't understand two fundamental fiscal principles;
- The corrosive impact of inflation
- The corrosive impact of the compounding of inflation.
Osborne's decision was based on 'something for nothing'.4 He talked of 'waste' and 'inefficiencies' to confuse the electorate. Simultaneously, additional duties and responsibilities were imposed on councils.
Since 2010, British inflation has been 46.88%.5 Havering's stand still council tax should have increased at the same pace. In 2010-11 a band D was £1,505. This year, 2023-4, it's £2,088.13. Inflation linked council tax would have brought the figure to £2,210.56. Havering is minus £122.43 per band D house. There are 107,798 houses in Havering and band D is the average. Osborne's misunderstanding about inflation has cost Havering approximately £14 million annually.
But the Conservative chancellors weren't finished with their attack on local government. They reduced government funding. In 2010, Havering received £70 million. In 2023-4, it was £2.9 million. A real reduction of £100 million per year.
The cost of Conservative policies, 2010-23, for Havering is £144 million per year. This is why Havering will probably go bankrupt.
Addendum: Conservative chancellors 2010-23 (their university degree in brackets)
- George Osborne (History)
- Philip Hammond (Philosophy, politics and economics)
- Sajid Javid (Economics and politics)
- Rishi Sunak (Philosophy, politics and economics)
- Nadhim Zahawi (Chemical engineering)
- Kwasi Kwartang (Classics and history)
- Jeremy Hunt (Philosophy, politics and economics)
Notes
1 Havering Council balancing on the brink of bankruptcy-A '114' could be issued within months. – The Havering Daily
2 Osborne was educated at private schools: George Osborne - Wikipedia
3 Council funding for taxi trips for Havering school children with special needs to cease (taxi-point.co.uk) "….reimbursement for fuel or a trip via ride-hailing service Uber would cost approximately £30 per day….disabled children will experience changes, 'appropriate measures' will be taken to ensure their needs are appropriately addressed." The human cost of bankruptcy. The weakest and most vulnerable suffer first
4 The 2016 Brexit referendum 'battle-bus' is identical with the false claim that leaving the EU would 'free up' £350m a week for the NHS.
5 Inflation calculator | Bank of England
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