‘Keep Taxes Low! Sell the Family Silver!’ The Road To Bankruptcy

Henry VIII looted monasteries because he wanted their wealth for his aspirations by the 17th century Britain was impoverished once more causing civil wars.1 Between 1700 and 1900 British vast wealth came from exploiting the Empire. This was spent between 1914-8 and 1939-45 on two world wars. In the 1980s Britain’s wealth came from North Sea oil. Margaret Thatcher squandered this on war and defence spending.2,3 She followed this by selling national industrial assets, which were sold in, ‘Everything Must Go,’ sales.

Thatcher’s self-serving reason was ‘efficiency’. She included social housing in her off-loading of public assets. This turbo-charged the housing crisis of the 2000s. Her economic policies ended in 2013 with the Royal Mail privatisation.4

George Osborne’s fig-leaf was Austerity. By out-sourcing tax increases to local government he maintained the illusion that Conservatives are a Low Taxation party. The current (2023-4) Council tax permissions illustrate this graphically. Havering can increase tax by 3%, for local purposes. This can be increased by two percentage points to help pay for social care.5 Social care is a mandatory, demand-led service and very expensive.

Osborne, and successive Conservative Chancellors, out-sourced tax increases to local government to dodge bad publicity. However, the golden goose will die when well-run councils, like Havering, are bankrupted.6

Beginning with Henry VIII, Britain has had successive governments believing sound financial management is optional. Boris Johnson’s economic policy was, ‘Having my cake and eating it.’ All very amusing when a child says it but when a prime minister acts on that premise? Britain’s economically illiterate governments continue to impoverish the nation.

Notes

1 a) a parliamentary civil war 1629-40, b) three civil wars 1641-49, c) regime change 1649-60, d) another regime change, 1660-88, e) invasion/civil war 1688, f) yet another regime change 1688-1714. The 17th century was very unstable.

2 The Ricardian Curse, Margaret Thatcher and North Sea Oil | Odeboyz’s Blog (oedeboyz.com)

3 The British Army’s Global Delusions | Odeboyz’s Blog (oedeboyz.com)

4 Ironically the Royal Mail was established by the Tudors in 1516.

5 This a 67% increase on the basic, government approved council tax figure. 67%!

6 The UK councils facing potential ‘bankruptcy’ as coronavirus pandemic takes huge toll on public finances | National (inyourarea.co.uk) and also Local authority financial sustainability and the section 114 regime – GOV.UK (www.gov.uk)

Havering and the Budget: Council Tax 2023-4

If the Government is serious about raising money to pay for social care, as well as level up the country, it could increase revenues from council tax without putting an extra burden on the less well off, by overhauling the bands used to calculate it.1

Conservative governments have wrecked Havering’s finances since 2010. Funding has been slashed as has the ability of the council to replace lost revenue through increasing council tax. The 2022 budget statement allows councils to increase council tax by 3% plus 2% for social care responsibilities. This decision may result in Havering becoming bankrupt.2

The facts

In 2010-11, band D council tax was £1505. If this had increased by inflation, the 2022-23 council tax would have been £2123.94, it’s actually £1970.97.3 The shortfall is £152.97 for band D houses in Havering, which is 10.16%. Owners of band H houses have benefitted massively from this policy.4 Havering council is losing huge amounts of revenue because Conservatives like to ‘keep taxes low’.

‘Keeping taxes low’ has been popular since 2010. But the chickens are coming home to roost. Conservatives want something for nothing. And the result is their policy will bankrupt Havering and wreck our society.

Very challenging decisions will be made by Ray Morgon’s cabinet because the government obliges Havering to ‘balance the books’. He can’t ‘print’ money to sort out Havering’s problem unlike the government. Statutory care services will be degraded along with other services like the weekly bin collection.

The Road to Bankruptcy

  • The amount collected in Council Tax for 2022-3 was £176.185m.5 If this had been increased by inflation, since 2010, revenue would be £17.9 million more this year.

Shortfall £17.9 million

  • If the £70 million government grant of 2010 had been increased by inflation it would be worth £77.12 million. Havering received £1.5 million for the 2022-3 financial year.

Shortfall £76.62 million

Total Shortfall for 2022-3: £93.52 million

The entire budget programme of cuts, efficiencies, job losses and service degradation are a direct result of Conservative policies since 2010. Morgon’s four year savings programme of £70 million is less than a single year of revenue shortfall caused by government policies.

Notes

1 Comment: ‘A council tax rise (done right) might not be a terrible thing’ (msn.com)

2 Havering’s Overview and Scrutiny Board, 13th October 2022 – Politics in Havering See this for an analysis of the budget Autumn Budget: Council tax could rise above £2,000 per year for the first time | ITV News

3 2010-11 24 February 2010 Council (Council Tax) Agenda.pdf (havering.gov.uk) £1505 council tax if growing with inflation, as calculated by the Bank of England, means that in 2022-3 that figure should have grown to £2123.94. Search results | The London Borough Of Havering £1970.97 2022-3

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

5 10 – Appendix G – Council Tax statement.pdf (havering.gov.uk)

Havering’s Register of Interests: The Cabinet

Filling in the Register is a legal obligation and yet Havering’s councillors struggle. Havering’s councillors have professional assistance but seem disinclined to use it. The Cabinet are elite councillors so it’s very important they’re open to scrutiny. Question One is stupid simple and is routinely not answered, ignored, or misunderstood.1

Q1 “Prescribed Description: Any employment, office, trade, profession or vocation carried on for profit or gain.”

Cabinet members receive £35,000, which qualifies, “for profit or gain.” Surprisingly none of Havering’s cabinet members think so. There are other anomalies, which will be revealed in this survey.

Keith Darvill’s1 entry says he’s a self-employed consultant. He doesn’t remark he’s a cabinet member.

Gillian Ford’s entry says she’s an Associate of Shared Service Architecture Ltd. She doesn’t say she’s deputy leader of the Council on £37,500. She’s also a member of the Local Government Association’s2 City Regions committee earning £8,908

Oscar Ford ignores the fact he’s a cabinet member despite it being a substantial supplement to his pensions.

Paul McGeary’s entry says he’s Head of Estates, NELFT without adding he’s a cabinet member.

Paul Middleton owns Essex PC Fix without adding he’s a cabinet member

Ray Morgon’s entry says that he’s a “Full-time councillor”. That understates his actual position as Leader of the Council on £50,000

Barry Mugglestone answered ‘None’ for Question One. As a cabinet member he earns £700 pw

Christopher Wilkins agreed with Barry and answered ‘None’. He’s a cabinet member and a landlord (Q4).

Cabinet members earn more than many Havering Council employees who work full-time. If they can’t understand “profit or gain” what else can’t they understand?

Graham Williamson I couldn’t access his entry.

Notes

1 For Keith Darvill see Councillor details – Councillor Keith Darvill | The London Borough Of Havering All the other named councillors have identical access points.

2 Keith Darvill, Ray Morgon and Michael White are also on this association but aren’t paid. For paid members see SRAs September 2022 (local.gov.uk)

Havering’s Overview and Scrutiny Board, 13th October 2022

There was a stench of despair in Havering’s discussions about the 2023-4 budget.1 The public consultation process will fail because residents don’t understand council budgets. They also think this budget is rearranging deckchairs on the Titanic.

Beginning with George Osborne’s Age of Austerity, 2010, local government has been starved of funds. His insane ‘policy’ was compounded with zero Council Tax increases followed by inflation ‘caps’. Havering’s lost a minimum of £70m annually since 2010 not including the ‘lost’ revenue from actual inflation increases.

The decline in funding has been accompanied by increased  responsibilities in Children and Adult services. These services consume 70% of the budget, making an inexorable push towards a Section 114 notice which means decision making is put in the hands of the government.2 Havering’s CEO was bleakly frank about this possibility. He said current section 114 notices applied to imprudent, badly managed councils but future notices would hit well run councils like Havering, which had run out of resources.3 In brief, Conservative government policies are bankrupting local government.

The council will lobby MPs and ministers. The CEO held out little hope but he’d work hard to get Levelling-Up money.

Addendum: How councillors reacted

Gerry O’Sullivan drew contributions from every councillor. Questions ranged from the abrupt, Mandy Anderson, (@21 minutes)4 to windbag, Philip Ruck (@50 minutes). Philip asked the killer section 114 question, eliciting the important CEO response. David Taylor’s (@71 minutes) dog-whistle questions didn’t get the preferred answers. Damian White worked hard as ‘lead’ opposition councillor. The others seemed over-whelmed by the complexity of it all.

Notes

1 Annotator Player (sonicfoundry.com)

2 CP524_financial_sustainability_Oct_2021.pdf (publishing.service.gov.uk)

3 Hear the comment @ 55 minutes

4 This is when she began speaking

Havering’s Places Overview and Scrutiny Committee, 4th October, 2022

Ray Morgon has reformed Overview and Scrutiny (O/S) committees. Between 2018 and 2022 they were a ‘pot-of-gold’ for Damian White’s Conservatives. Short infrequent meetings were the order of the day. Ray’s principal reforms reduced the O/S committees from six to two with Conservatives chairing them. This meant they controlled agendas. But Ray didn’t anticipate sabotage.

Robert Benham, Conservative chair, kept his O/S committee in abeyance for five months. The O/S committee has five Conservative members. Three Conservative places are unfilled. Unfilled after five months! It’s disappointing losing elections but this is childish. They’re betraying their voters.

Item 41was a discussion of the outrageous events in Rainham’s Launders Lane. For twenty-two years there’s been abuses there. Havering’s Emergency Planning unit, the Environment Agency and London Fire Brigade are stretched to breaking point by numerous fires and air pollution incidents. Owners have been jailed but abuses continue.

Solution? Unfortunately, the solution is for the borough to CPO2 the land. If they do, they buy the problems. What, the chief officer wondered, is under the ground. They don’t know and finding out could be very expensive.

This item was a direct result of Sue Ospreay’s passionate speech in council. Neither she nor the other two Rainham councillors attended this vital meeting.

Notes

1 Launders Lane Report – OSSC 15th September.pdf (havering.gov.uk) This is a very detailed report showing the level of environmental challenges, criminality and contempt for the council and other agencies having responsibilities for the well-being of the public.

2 CPO = compulsory purchase order

Havering’s Cabinet: A First Assessment

The cabinet complained about government under-funding,1 which is like sailors hating the sea. There was no discussion about the energy crisis, home-working and office accommodation, staffing and retention, interest rates and ways of dealing with any of this in 2023.

Chris Wilkins: (began2) He spoke repetitiously and occasionally lost his place. He neither highlighted pertinent issues nor contextualised them. He offered counsels of despair.

He hasn’t discovered he’s a policy maker.

Gillian Ford: (20 minutes) She leads the principal cost centre, Adult Services. Her brief comments included an anecdote about a quadrupling of staff for a care issue. Typical? Probably not – just pre-emptive shroud waving.

Her remarks were inadequate. Cabinet needed insights on her principal revenue vampire: staffing costs. (pro rata cuts would be £6.5 million of the £19 million needed)

Keith Darvill: (21) Keith didn’t comment on his budget, preferring waffle. Flooding is a significant problem but can costs be subsumed into current budgets? Ambitions needed outlining especially if involving capital and ‘Invest to Save’.

Keith’s speech needed preparing up front.

Ray Morgon: (24) Ray’s interventions gave momentum to the debate. He claimed that if the public understood that 70% of the Council’s revenue went on statutory services, they’d accept a deteriorating environment. Laughably, he thought Conservative MPs would lobby for more funding.

Graham Williamson: (32) His speech included the phrase ‘Perfect Storm’ to describe financial pressures. He was stoical about losing popularity when cuts bite. He worried about the Council losing control to Commissioners on the balanced budget issue.

The best speech of the night.

Barry Mugglestone: (42) He spoke about increasing car parking charges which, surprisingly, isn’t an increase at all – it’s a return to pre-pandemic charges. So that’s all right then.

He read his speech, which other cabinet members should copy.

Oscar Ford astonishingly didn’t speak. He’s lead member for Children’s Services, which destroys everyone else’s budget. Nothing! Not even, ‘Thank you’. (pro rata cuts would be £6.5 million of the £19 million needed)

Paul Middleton: (1:02) He ought to be aware that his budget is likely to be savaged. He supported the budget propositions as being responsible.

Addendum: Government funding 2010-2022

Government funding has declined from £70 million to £1.5 million. This decline began with George Osborne in 2010. If the £70 million had increased with inflation it would have become £96.4 million. The real shortfall is £94.9 million. Conservative governments have increased taxation by outsourcing it to local authorities. Havering’s two Conservative MPs have been the cheer leaders of this policy.

Inflation calculator | Bank of England

Notes

1 Cabinet meeting 28th September 2022

2  Annotator Player (sonicfoundry.com) Times when they begin speaking, are in brackets

Havering’s Cabinet Meeting, 28th September 2022

Boris Johnson’s economic philosophy was straightforward: I want my cake and I want to eat it.1 Ray Morgon’s Cabinet would do this too if it wasn’t fantasy. Havering once had a substantial government grant but Osborne’s Age of Austerity programme ended that.2 Havering’s budget is apparently balanced but this is achieved by ‘smoke and mirrors’. Damian White’s March budget is a classic example.3 400 redundancies were penciled in, without any loss of services. A claim made with a straight face.

Local government finance is boring until the bills arrive. (Most people used to pay energy bills without bursting into tears. Not anymore.) Since 2010, Havering’s government grant has evaporated from £70 million to £1.5 million. Havering hasn’t been allowed to increase Council Tax to fill the revenue gap. The inevitable decline in public services has accelerated and will continue.

‘Low hanging fruit’ will be picked. This means school crossing personnel, park gates left unlocked, fortnightly bin collections, library hours cut, swimming pool hours reduced for example. HRA’s sacred cow is street care but it might take a hit under the pressures.4

Setting Council Tax for 2023-4 will be hideous. The council is crippled by financing Adult and Children’s services, which are statutory.5 Will Kwasi Kwarteng cap Council Tax increases? Realistically 10% is needed but the Conservative government might find this politically unacceptable.

The government imposes duties on Havering council and denies the resources to fulfil them.

Notes

1 For Brexit it worked out this way Post-Brexit trade: UK having its cake and eating it, says Boris Johnson – BBC News On a personal basis he ‘paid’ for gold wallpaper and then got a dupe to actually pay Boris Johnson’s Wallpapergate: Leaked £200,000 estimate reveals flat renovation plan included £7,000 rug and £3,675 trolley | The Independent

2 Budget 2010: Pain now, more pain later in austerity plan | Budget | The Guardian

3 Agenda for Council on Wednesday, 2nd March, 2022, 7.30 pm | The London Borough Of Havering

4 ibid  HRA councillors voted to reduced councillor allowances to pump money into street care in a pitiful example of ‘gesture’ politics.

5 Chris Wilkins led the debate. He floundered through a repetitious presentation. He weaved in and out of ‘pressures’ like a ship drifting without power. And the elephant in the room – the size of the Council Tax increase – wasn’t hinted at. Heroically Ray said that they should lobby the two Conservative MPs to see if they’d vote against the government. See Annotator Player (sonicfoundry.com) for the debate. Wilkins speaks for the first 20 minutes

The Queen Elizabeth Memorial Council Meeting, 22nd September 2022

Ray Morgon (@ 7 minutes)1, as Leader, had to get it right and he did. The entire conduct of the meeting was in step with his quiet deferential, but not groveling, opening statement. He didn’t use his entire five minutes, saying what needed to be said with a suitable amount of brevity. It was unrushed and sincere.

Keith Darvill (10 mins) as a former MP had met the Queen and remarked on that occasion. He also commented on her charity and voluntary work and her position in the Commonwealth.

Martin Goode (15 mins) had an interesting comment about the way that Canadians honoured her as head of state. He also had an amusing anecdote of mistaking Princess Margaret for the Queen as a very young child in east London.

The Mayor (17 mins) read a eulogy from the Islamic Cultural Centre before remarking on his work as a fireman at Wimbledon with the Queen present.

Judith Holt (21 mins) made a moving and deeply personal series of anecdotes about the importance of the Queen to her own family. She queued for several hours last week for the laying in state.

Linda Hawthorn (32 ) told a lovely anecdote about the Queen’s visit to the Queen’s Theatre in 2003. She spoke briefly but obviously felt deeply.

Viddy Persaud (38) began by saying she was worried about repetition but then comforted herself by saying (rightly) that on this occasion repetition was appropriate. She was the last speaker.

There were 15 speakers in all and this is a summary of the meeting. I thought the meeting hit the right note throughout, as councillors rose to the occasion.

Note

1 In brackets means the start time. The webcast is here Annotator Player (sonicfoundry.com)

Havering, ULEZ and Public Health

Government intervention in urban Public Health began in 1835 when councils were permitted to build pavements and charge them to ratepayers. 120 years later The Clean Air Act was passed by a Conservative government to stop thousands of preventable deaths from air pollution. The Great Smog, 1952, slaughtered Londoners adding to the normal annual toll.

The 1956 Act banned traditional open coal fires and turbocharged the switch to central heating.

 

Domestic coal delivery was a very hard and dirty job

The Clean Air Act was transformative, with housing changed forever. There were significant costs during the transition period. But! Tens of thousands of lives were saved and Londoners lived longer, happier, healthier lives.

ULEZ stands in this tradition. “The ULEZ is central to the Mayor of London’s plans to improve Londoners’ health. It will clean up the city’s toxic air, which leads to the early deaths of thousands of people every year.”2

The Great Smog of 1952 was a physical reality. Parts of London came to a halt with choking polluted air and very poor visibility.

 

The Great Smog of London killed thousands of Londoners

21st century air pollution is invisible, though deaths are unpleasantly real. Three people a week die in Havering from air pollution. Deaths are the gruesome tip of a toxic iceberg. Thousands of people suffer respiratory problems which ruin their everyday lives.

During the transition to EV vehicles, ULEZ is a small and important step. It stands in a long Public Health tradition stretching back to 1835.

Notes

1 Summer 2022. ULEZ is London’s Ultra Low Emission Zone. For the historical contest see Highway Act 1835 – Wikipedia and Clean Air Act 1956 – Wikipedia

2 The Mayor’s Ultra Low Emission Zone for London | London City Hall There are about 9,500 air pollution deaths each year Twice as many deaths caused by air pollution in London – HealthyAir

Havering Councillor: Sue Ospreay (Rainham and Wennington)

Sue’s a maverick politician.1 She was a Conservative elected in May, 2022 and joined HRA2 four months later. Conservative voters thought they’d ousted Resident Association councillors but Sue was Conservative in name only. Despite voting for change, Conservatives now continue to have Residents’ Association councillors.

Sue’s a maverick in other ways too. Her Register of Interests document is blank, simply signed at the bottom. The Register is a legal requirement, which must be filled in within in 28 days of an election. The question is, does a blank answer constitute ‘an answer’?

Question One asks for, “Any employment, office, profession or vocation carried on for profit or gain”. Sue’s left it blank but it’s a criminal offense to not ‘disclose a Disclosable Pecuniary Interest’. Sue might be unemployed and living in a tent but she’s a councillor picking up £200 a week. £200 a week looks like a ‘gain’ to me. Sue’s blank ‘answer’ appears to be false.3

Question Two relates to Sponsorship which means ‘…financial benefit….towards your election expenses.’  There’s evidence that Sue had help with ‘election expenses’. Her fellow councillor, Jackie McArdle, declared assistance from the Conservative Party for election expenses.4 It’s unlikely the Conservatives discriminated against Sue. It’s possible this blank ‘answer’ could also be false.

Question Four relates to Land. I’d have thought Sue, as a middle-aged person living in a high home ownership area like Havering, did have an interest in property but there’s no evidence one way or the other. There’s no evidence for blank answers to Questions 3, 5, 6 and 7.

Section B Personal Interests is left blank, which is surprising considering her interest in allotments.

Being a maverick and defecting from one party to another without calling a by-election is one thing. Not fulfilling a legal obligation is dereliction of duty at the very least and calls into question her status as a councillor.

Notes

1 This is her Register of Interests document mgConvert2PDF.aspx (havering.gov.uk) Accessed 9th September 2022

2 HRA = Havering Residents’ Association

3 As is that of her fellow councillor Sarah Edwards who’s also left this question (and question two) blank.

4 mgConvert2PDF.aspx (havering.gov.uk)