Havering’s £50 A Minute Councillors

What the Government Says Havering’s Councillors Should Be Doing

The role that overview and scrutiny can play in holding an authority’s decision-makers to account makes it fundamentally important to the successful functioning of local democracy. Effective scrutiny helps secure the efficient delivery of public services and drives improvements within the authority itself. Conversely, poor scrutiny can be indicative of wider governance, leadership and service failure.1 Ministerial introductory statement (my emphasis)

What Havering’s Councillors Did in the First Six Months of 2021

Health Overview & Scrutiny Sub-Committee

23rd February………………………………….1 hour 10 minutes

Chair: Nisha Patel……………………………£55.72 a minute

Crime & Disorder Sub- Committee

18th March…………………………………….1 hour 15 minutes

Chair: Sally Miller……………………………£52.01 a minute

Environment Overview & Scrutiny Sub-Committee

18th February………………………………….1 hour 15 minutes

Chair: Maggie Themistocli…………………£52.01 a minute

Individuals Overview & Scrutiny Sub-Committee

9th March; 13th April…………………………….2 hours 05 minutes (in total)

Chair: Christine Smith……………………….£31.21 a minute

Towns & Communities Overview & Scrutiny Sub- Committee

9th February……………………………………2 hours 15 minutes

Chair: Ray Best………………………………£28.89 a minute

Children & Learning Overview & Scrutiny Sub-Committee

4th March……………………………………. 2 hours 25 minutes

Chair: Judith Holt…………………………..£26.90 a minute

Overview & Scrutiny Board

16th February; 10th March; 22nd June…………4 hours 32 minutes (in total)

Chair: Darren Wise………………………….£27.03 a minute

Chair of the Board is paid £14,706 a year sub-committee chairs get £7803. 2 There’s no interaction or constructive discussion between Overview and Scrutiny committees and the Cabinet. Worse, on no occasion has a Cabinet member attended an Overview and Scrutiny committee to discuss policy issues.

Chairs are are actively preventing Overview and Scrutiny committees from fulfilling their legal duties and are therefore in breach their crucial role in Havering’s democracy.

There were no meetings of any Overview and Scrutiny Sub-Committee in January or May

Notes

1 Government advice on Overview and Scrutiny couldn’t be any firmer. They place it at the centre of local democracy. Overview and scrutiny: statutory guidance for councils and combined authorities – GOV.UK (www.gov.uk)

2 2020 Members Allowances final.pdf (havering.gov.uk) 

I made an error on sub-committee chair allowances which was corrected by Cllrs. Durant and Morgon . Thank you to them. The text is now accurate.

Havering Council Budget Consultation 2021-22

Havering’s 2021-22 Budget Consultation is a device which will be interpreted as an endorsement. Nonetheless, I ploughed through to see what could be gleaned from the ‘explanations’ which were offered to the questions. In truth there wasn’t much.

The amount raised by Council Tax is £130.1 million. An additional £339.6 million comes from government. Basically, Havering is a conduit funnelling resources into schools and social services. This makes the million pounds spent on councillor allowances unjustifiable. Decisions are made elsewhere. So what’s their role?

Question eight on Adult Social Care, and ‘Better Living’ reveals a saving of £3.569 million.** How? The gist is “…rather than relying on statutory services.” I don’t know what this means for vulnerable people in this context. However those receiving “…statutory services” will know and care rather a lot.

‘Smoke and mirrors’ continue for questions 8, 9, 10, 11. By question 15, the bottom of the barrel has been reached, “This saving was presented as part of the original Business case signed off by Cabinet in 2019.”(my emphasis)And the saving is – £190,000 – on a budget of £469.7 million. It wasn’t achieved in 2020 so why will it happen in 2021?

Question 17 is the crux of the consultation. But my option wasn’t there. I think council tax is too low.*** That was too shocking to be an option.

Notes

* Two informative graphs explain ‘Income-Spend’. They’re scene setting.

** Notice that they claim a saving to the nearest £10,000, which isn’t a rounding error.

*** Havering Council Tax: Is It Too Low? – Politics in Havering

Source

Havering Budget Consultation 2020 – London Borough of Havering Council – Citizen Space

Damian White and Romford Marks and Spencer (M&S) July, 2019

Damian personally authorised the £14.7 million purchase of M&S’ Romford site in July, 2019. The checks and balances of the Overview and Scrutiny committee were by-passed by Darren Wise, the chair. As a consequence, the decision wasn’t subject to robust analysis as it was hurried through. A Havering College 6th former studying Business Studies knows this is the worst possible way to make an investment decision. The students would have done a SWOT analysis first.

Strength M&S is an iconic retailer with a loyal customer base

Weakness M&S is a flabby, badly managed company feeding off past glories

Opportunity M&S has a wonderful reputation for quality, which can be migrated into other activities

Threat M&S, along with every other retailer, is faced with online competition, which is destroying their principal activities.

Havering’s M&S investment depends on a revenue stream paying the costs related to borrowing £14.7 million. The question posed by ‘Threat’ is: will M&S pay their rent? Many retailers are negotiating with landlords to accept CVAs with downward adjustments, sometimes to zero.

£14.7 million is required to replenish the capital allocation for new opportunities. A significant opportunity arose to purchase the lease of the premises occupied by Marks & Spencer in Romford earlier this year [2019] which reduced the allocation by a similar amount. The annual lease income being received from Marks & Spencer covers the ongoing revenue costs of the purchase and makes a return to the General Fund.”**

Amazingly the July, 2019 report says, “this is a liquid asset, providing many of the characteristics which investors are seeking.” *** (my emphasis) The statement is nonsense. In 2019, some property unit trusts couldn’t meet redemption demands because their property assets were illiquid and they’re professional property investors.

Damian’s administration relies on the Harold Wood 3, one of whom is Darren Wise. He’s the Overview and Scrutiny chair who agreed scrutiny wasn’t applicable due to the urgency of the decision. The Cabinet was by-passed by Damian, using ‘strong leader’ provisions of the Localism Act. He behaves as if he’s an elected Mayor. (see Addendum One)

The use of ‘urgency’ clauses is exceptional and the assistant Director of Regeneration added a hand-written note to the document (see Addendum Two) stating it was authorised by Darren Wise. This suggests that he had doubts about whether it was urgent. The preliminaries of a property deal of this size take an extended period of time. Prior to purchase it went through due diligence, ensuring the deeds were accurate, the physical condition of the 52 year old building, the insurance details (which were odd, as it turns out). Finance has been arranged for thirty years. There was no ‘urgency’.

So why did Damian do it?

Nigel Wilcox, the executive director of the Institute for Economic Development said: “The conclusion is that local authorities are embarking on risky strategies – but they have clearly been driven to this route through the underfunding from central government.” (my emphasis)

£14.7 million of the Havering 2019 capital budget was used for property speculation by people who are naive as investors. Damian has saddled Havering with a 30 year debt for a non-performing asset which is probably unsellable and Darren assisted him. Covid-19 is the final nail in the coffin of this ‘investment’, which was reckless from the beginning.

Addendum One: The strong leader

In 2009 Milton Keynes Council moved to the Strong Leader model – a model where all powers that fall to the Executive are now discharged solely by the Executive Leader (whether personally or through delegation), and not by the Executive as a ‘body’.”

The two ‘executive’ models that now exist are the Executive Leader model (known as the Strong Leader Model) and the elected Mayor model.”

…in practice these will be delegated to other executive members (cabinet members), committees of the executive, or officers of the council. But even once delegated this does not stop the leader from personally exercising any executive function.”* (my emphasis)

https://milton-keynes.cmis.uk.com/milton-keynes/Document.ashx?

And https://www.unison.org.uk/content/uploads/2013/06/On-line-Catalogue213663.pdf

Notes

* Strength – Weakness – Opportunity – Threat

** https://democracy.havering.gov.uk/documents/s39402/190910%20Budget%20Update%20-%20report%20final%20100919.pdf 18th September 2019

*** See https://democracy.havering.gov.uk/documents/s38373/49%2039-43%20South%20Street%20Romford%20Acquisition%20and%20finalisation%20of%20outstanding%20pre-conditions%20on%20Prope.pdf

SourcesFor the retail environment as an investment see https://www.ellandi.com/our-news/ellandi-media-coverage/2019/11/exclusive-no-evidence-councils-buying-shopping-centres-out-of-the-area#.XrxBJG5Fy70

For illiquid property unit trusts see https://www.hl.co.uk/news/articles/Investing-in-property-consider-liquidity-risk

For M&S relegation from the FTSE 100 see https://www.theweek.co.uk/103101/why-ms-is-about-to-drop-out-of-ftse-100 Next joined the FTSE 100 in 2001

History of companies joining and leaving the FTSE 100 Index since 1984

For a very good summary of CVA see https://corporatefinanceinstitute.com/resources/knowledge/trading-investing/credit-valuation-adjustment-cva/ see also https://www.savills.co.uk/research_articles/229130/290114-0/spotlight–the-impact-of-cvas-on-the-uk-retail-market