Havering’s Council Tax Meeting, 26th February 2025 (part one)

Background

Havering is bankrupt. A legal ‘budget’ was set by borrowing a maximum of £88m from the government. The interest will, catastrophically, be added to the debt.

Principal Speeches

Chris Wilkins (Cabinet Member, Finance)

Chris’s (12 minutes)¹ new tactic is a seminar presentation. There were constant references to slides (invisible to users of the webcast). It reeked of officer speak.

He spent 13 minutes whining. His attack on the Conservatives was ineffective.²Chris failed to convince on the expensive urgency of the ‘food waste project’. He’s going to lobby the government for more grant finance. Good luck with that!

John Tyler (Cranham RAs)

John was a revelation (26). He offered a critique of choices and said government loans will cost £5m in interest. His propositions were adding seven posts to increase efficiency, pausing the Harold Wood library closure and a reduction in carparking fees. His one saving proposition was not borrowing a £1m and saving £50k interest.

Dilip Patel (Conservative)

His speech (34) provoked a stand-off between the Mayor and the Conservatives. They displayed posters which the Mayor didn’t like. It’s procedurally OK but the Mayor demanded they be removed and the Tories backed down. (If they’d been serious they’d have challenged the chair and had a ding-dong.)

Dilip’s amendments were more police, more CCTV and keep open Harold Wood library. This all paid for by not having the food waste scheme. Good knockabout stuff.

(The Mayor explained what a ‘point of order’ is to Barry Mugglestone.)

Keith Darvill (Labour)

Keith made a very good speech (46). He said the budget is ‘fiction’. And he’s right. Havering’s bankruptcy means government loans balance the books. The debt could reach £200m in 2026-7 with only statutory services provided. He hoped the Fair Funding propositions would rescue Havering but increased defence spending make that unlikely. Next years’ interest charge will be about £10m.

Martin Goode (East Havering RAs)

Martin returned (58) to his normal themes of budgets that over promise and under-achieve. Importantly he highlighted the costs of closing libraries. These costs reduce savings. He thought that Harold Wood’s closure should be paused. A good solid speech. He should provide evidence about under-achievement of savings. Martin relies on assertion, which creates a credibility gap.

Best Speech: John Tyler

Note

1 Annotator Player All times relate to this webcast

Havering Council and the St Francis Hospice Charity

There are an impressive 16 charity shops in Havering.¹ The charity with the greatest number is St Francis Hospice with three shops.

Rated outstanding by the CQC, Saint Francis Hospice [SFH] provides expert care for people in our community with palliative and end of life care needs.²

SFH’s three shops had sales of £2.6m³ in 2023. This success encouraged them to open a ‘superstore’ in Hornchurch. Additionally, there’s the Loughton Boutique, which is their first shop in west Essex.⁴ SFH is a retail operator mixing charity with sound business acumen. It has reserves of £17.3m.⁵ SFH is a significant charity but ‘small’ financially.

Havering Council has tiny reserves,

“£8m of un-earmarked reserves is equivalent to c4% of the Council’s projected 2024/25 net budget of £19.75m [this is an error. It ought to read £197.5m] This is far below the recommended minimum level of reserves and is significantly lower than the average level of un-ring-fenced reserves across London.”⁶ (my explanation)

Havering’s dire financial position is illustrated by the fact that SFH has reserves twice the size of theirs.

Havering is a compulsory supporter of SFH.⁷ SFH pays 20% of the business rates due because of a 1988 decision.⁸ This decision costs Havering tens of thousands of pounds in business rates from the 16 charity shops.⁹

Havering is a ‘victim’ of a decision made 37 years ago forcing them to reduce the business rates for charity shops by 80%. Charity shops are worthy but there is no chance they’d still be getting a reduction if Havering had a choice.

Notes

1 havering’s charity shops – Search This site includes a map

2 Saint Francis Hospice – Home CQC = Care Quality Commission

3 application-pdf p26

4 loc.cit.

5 ibid. p44

6 5-14 Appendix H – Section 25 Statement of Robustness.pdf para 8:1

7 Charity Relief – Businessrates.uk

8 Business rates—charities and not-for-profit organisations | Legal Guidance | LexisNexis

9 This is a heroic estimate.

Havering’s Cabinet Meeting, 5th February: Budget (part two)

“I believe in miracles….” Hot Chocolate (1975)¹

The meeting began with Chris Wilkins, the cabinet member for finance, reading a document which he didn’t appear to have written (1:26).² Very sensibly, HRA don’t use Chris as their main man during financial discussions.

The discussion was brutal.

Ray Morgon set his stall out. The government review of Havering’s finance is vital to his strategy. The Fair Funding Review (1:31) is the miracle which will stave off Havering’s financial catastrophe. The Chief Executive (1:46) said that he wouldn’t consider requesting a council tax increase beyond 4.99% because Havering’s problems weren’t caused by decision-making in Havering. This reflects HRA’s policy.

The director of Finance expressed caution. She was ‘very concerned’ about the long-term sustainability of Havering (1:34). Keith Darvill (1:32) probed forensically, discovering that the interest on the capitalisation programme hasn’t been paid. This means debt accelerates each year through the joys of compound interest. The director said that the conversation will be ‘very different’ in 2028 if nothing changes.

“…if you have debt, compounding of the interest you owe can make it increasingly difficult to pay off.”³

Capitalisation Funding for day-to-day expenditure is insanity.

The Chief Executive (1:31) said after his meeting with the minister there would be no change in government policy concerning debt repayments.

HRA is hoping the government will back down first and won’t enforce the debt. HRA is engaging in a form of “Can’t pay, Won’t pay.”⁴Havering is depending on safety in numbers. They’re hoping that along with the 18 other councils which are being buried alive in debt, they will have to be rescued.

Notes

1 The lyrics aren’t about local government finance. But are great fun. Read them. Relive the 70s! i believe in miracles hot chocolate lyrics – Search

2 Annotator Player All times refer to this webcast

3 The Power of Compound Interest: Calculations and Examples

4 This is a Marxist play, 1974, by the Italian Dario Fo which is a satire on consumer resistance to high prices. Can’t Pay? Won’t Pay! – Wikipedia

Andrew Carnegie loved libraries

Council Meeting, 15th January 2025 (part one)

Attendance

Nine councillors (16%) were absent. Absenteeism like this is a *Red Flag* demanding action.¹ Item 7b gave permission to a councillor be absent because of serious illness and that is right and proper. But what of the other eight?

Question Time²

Keith Prince (13 and 22 minutes)³ asked two questions about libraries. Gillian Ford didn’t show leadership in either answer. Keith wondered what additional work Gillian had done to garner community support and extend the commercial side of the library estate. She hadn’t done anything. *Proactive* is forbidden territory for her.

Dilip Patel (45 minutes) highlighted the tragic case of an 85 years old lady who’d been without heating for a month. Paul McGeary mumbled. His gravedigger voice buried this annoying triviality and the moment passed.

Webcast

The quality is poor and worsening. Gillian’s answer to Keith’s second question featured the brooding figure of Barry Mugglestone. At 37 minutes Natasha Summers disappeared altogether being replaced by Luke Phimister’s name. David Taylor’s question wasn’t filmed at all and Jane Keane’s question was truncated. Computer King Paul Middleton should solve this shaming problem. It makes the council look incompetent.

Notes

1 Councillors attendance summary, 25 July 2024 – 17 January 2025 | London Borough of Havering Six (11%) have 50%, or fewer, attendances and that doesn’t include the member who is seriously ill.

2 Council Questions 15 January 2025.pdf

3 Timings relate to the webcast Annotator Player

Havering’s Institutional Racism Report

The suppressed report has been published three years late.¹It’s virtually unreadable.

The all-important pay gap is analysed, “Work needed to be done to assess if there is an ethnic pay gap and what that means.”² Career progression is poor because, “The senior levels of the organisation are not a very diverse representation hence why these views may be held.”³ (my emphasis) (see addendum)

The report reveals their racial biases, which they would probably deny having. Institutional Racism occurs when decision-makers have biases,

“….which, covertly or overtly, resides in the policies, procedures, operations and culture of public or private institutions – reinforcing individual prejudices and being reinforced by them in turn.”⁴

Institutional racism emerges from homogenous groups enforcing toxic biases. BAME candidates are judged prior to interview; their in-service performance is derided and complaints are unrecognised as legitimate.

Objective Area 2 7:1, says,

“The political and executive leadership have publically (sic) committed to reducing inequality, fostering good relations and challenging discrimination.”⁵

These aspirations are inspiring but have cabinet members and senior management the humility to implement them? Humility because they must reflect deep and hard about their actual racial preferences. Can leopards change their spots?

The Romford Recorder worked tirelessly for publication and the council worked equally hard to prevent publication. When it was published the Recorder said,

“Havering released a redacted and unenlightening version of the investigation, containing none of the allegations the LGA had referenced.”⁶ ‘Unenlightening’ is code for saying they believe it’s been censored.

Havering’s CEO says the report doesn’t reflect the Council today. Let’s hope his assessment isn’t a self-serving delusion.

Addendum: Diversity

Cabinet: There are nine cabinet members all of whom are white, elderly or middle-aged. Seven of them are men.

Executive Directors: There are four directors, including the CEO.⁷ All four are white with two women. There is no information about their qualifications or where they were awarded.

Notes

1 READI Review – Havering self-assessment

2 p16 NB Pages aren’t numbered and page numbers come from my page counter

3 p17

4 What is institutional racism? – Institute of Race Relations

5 READI Review – Havering self-assessment p332

6 Why the Romford Recorder fought to uncover racism dossier | Romford Recorder

7 Executive Leadership Team | London Borough of Havering

Havering’s Council Meeting, 20th November 2024 (part two)

Militant trade unionists in the 1970s dragged meetings out to exasperate ‘ordinary’ members who left long before the end of meetings. Extremist motions were then agreed ‘democratically’. Keith Prince has watched the videos with enthusiasm.

Motion B (see addendum one) implies huge expenditure and Havering is bankrupt. Keith Darvill (2:07)¹ said ‘every park is different’, with the main difference being some parks can’t be economically fenced and gated. He cited Upminster Park. Barry Mugglestone (2:04) missed the point at length. The proposer Tim Ryan (2:00) was sincerely misguided. And that was the debate.

Enter Comrade Keith Prince (2:00) and (2:17).

Keith likes procedural points. His speciality is nit-picking. Unlike militant trade unionists, he can’t add two hours to a meeting. Whatever extremist motions he’d dreamt up – the Peoples’ Republic of Romford? – were unheard. Keith was posturing against the clock and a legal officer enjoying the limelight.

Keith had support from Michael White (2:20). Michael mocked the fact that the HRA demanded that their amendment be presented to council. HRA don’t realise THEY ARE the Administration and they don’t need motions presented – to themselves. The HRA motion was piffle.

Jane Keane (2:14) was outraged that the motion to discuss the safety of women was binned (see addendum two). Soothing words were spoken but there was a nasty taste in the mouth.

Best Moment: Dilip Patel’s (15) anecdote about former councillor Pam Craig

Addendum One: Conservative Motion B

Chamber recognises Havering has reached unacceptable levels of antisocial behaviour in our parks. Council calls on the Administration to produce a detailed plan to reduce levels of antisocial behaviour and to resume the overnight locking of parks, and to present this proposal at the meeting of Council.²

Addendum Two: Labour Motion C

This Council condemns violence against women and children and recognises the particular challenges of finding emergency refuge accommodation for mothers with boys over the age of 12 years old. This Council calls upon the Administration to work with refuge organisations to find solutions to the lack of available refuge places.²

Notes

1 Annotator Player All times refer to this webcast

2 Motions (Public Pack)SUPPLEMENTARY AGENDA Agenda Supplement for Council, 20/11/2024 19:30

Havering’s Council Meeting, 20th November 2024 (part one)

Havering Council’s descent into irrelevance is accelerating. The Leader didn’t make an announcement about his seismic budget consultation at the beginning of the meeting. It was published 48 hours later.

Keith Prince is another example (1:06). He’s a GLA transport committee member with constant access to TfL decision-makers. His question,¹

What lobbying has the Cabinet Member for the Environment undertaken with regards to the withdrawal of the 347-bus route since the most recent announcement by the Mayor of London?

Barry Mugglestone should have utilised Keith’s unique position to lobby the GLA. HRA claim to be independent of political party silos. Well, it doesn’t look like it. They should be working together and not squabbling.

The other 12 questions were ostrich like. None dealt with the impending disaster of the 2025-6 budget. There are four options for consultation (see addendum).²

HRA is proposing another loan. Guess-estimate £50-70m

OR, increase council tax. Guess-estimate 10-20%

OR, throw the towel in and get the government in to run the shop.

OR, Local Government Funding is adjusted for Havering. Guess-estimate ‘No chance’.

Question Time is ideal for probing Havering’s cabinet. Neither the Leader or the Finance cabinet member had a question to answer. The failed £54m loan was unremarked on. Was it even noticed?

The council’s inadequacy is shown by the fact that they can’t even successfully lobby TfL about a bus route!

Addendum: Budget Consultation – principal points

Another Capitalisation Direction (government loan)

Significantly increasing Council Tax beyond the Government’s proposals (this would require a referendum).

Section 114 (effectively declaring the Council bankrupt with the possibility of Government Commissioners being sent in to run the Council which in itself would incur significant costs).

Urgent intervention from the government (extra funding/funding formula review to reflect current population change and need).

Notes
1 Council Questions 20 November 2024.pdf Q12

2 Havering launches consultation as Council budget on precipice | London Borough of Havering

Havering’s Cabinet, 6th November 2024

Bankruptcy dominates council decision-making. Item 6¹ discussed the unfolding financial situation. Chris Wilkins (28 minutes) introduced the item in his ‘reading a shopping list’ style. Surprisingly, he sounds like a born-again Labour loyalist with a mission to rescue Havering after 14 years of Tory misrule.

The £52m government loan, negotiated with the Conservatives, is inadequate. Chris says the 2025-6 outcome will be minus £73m. Ominously, he (31) identified the Freedom Pass as a pressure point. Havering has many OAPs and the Freedom Pass is very expensive at £8m. Chris could be thinking of that as a ‘savings’ item. If the government does not increase Havering’s funding, Chris might have to consider a huge increase in council tax.

Ray Morgon, Gillian Ford and Chris love lobbying. It’s ludicrous and is the triumph of hope over experience. Ray (33) said the GLA expects 25% of councils to be bankrupt by 2026-7 along with Havering.

“To engage in discussion with the Government regarding a fix to the underlying budget issue the Council faces or agree a further capitalisation direction to allow time for funding reform to be actioned.”²

The recent Labour budget allocated £1.3bn for local government. Ray said Havering should receive good treatment because it’s virtually bankrupt. Interestingly, neither Chris or Ray mentioned that the interest rate for the £52m loan had been reduced by 1%. The 1% saves half million pounds in annual interest payments, which is £200,00 more than closing four libraries.

The government could lift the ‘cap’ on council tax increases, “It is unclear… whether…[the new Government] will allow authorities more flexibility regarding tax increases.”³

Chris won’t welcome empowerment. He prefers being a helpless victim. If the £21m shortfall is funded by council tax increases, it will be dramatic in an election year.

Notes

1 Annotator Player

2 (Public Pack)Agenda Document for Cabinet, 06/11/2024 19:30 para 8.2

“….agree a further capitalisation direction to allow time for funding reform to be actioned.” This means that they intend to borrow long term for current revenue pressures. This is financial insanity.

3 ibid 8.3

Havering’s Bankruptcy and Margaret Thatcher

Thatcherite economics in 1979 was straight-forward. Income tax was reduced and capital assets lightly taxed to reward Conservative voters.¹ Lost revenue was replaced with massive increases in regressive taxes like VAT. George Osborne, a Thatcherite without the brains, introduced The Age of Austerity, 2010-24. His freezing of Council Tax ultimately made Havering bankrupt because lost revenue wasn’t replaced.

Ray Morgon borrowed £52m, at 7%, from the government to replace the lost revenue in 2024. This is like using credit cards for day-to-day spending, which is obviously insane. Worse, the council is selling capital assets to fill the hole Osborne made. (Bankrupt aristocrats call this, ‘selling the family silver.’) It’s a futile tactic to buy time.

In a full year, 2% of council tax will be needed to pay the interest on the loan.

Havering is bankrupt because council tax is too low.². Trivial *cuts* like four libraries reduce the deficit by £300,000.³ Havering’s budget is £180M.

What does inflation, 2010-24 tell us?

General inflation: 61%⁴

House price inflation: 100%+⁵

Council tax inflation: 46.7%⁶

The 2024-25 budget deficit is expected to be £32M.⁷This is caused by Council Tax not being inflation linked. Council Tax is a Property Tax.

House price inflation has been at least 100% because of the magic ofThatcherite economics. Wealth in assets is lightly taxed and rises in value. Or, as the Bible says, The rich get richer.⁸ Born-again Thatcherites like Andrew Rosindell probably know this. Meanwhile pot holes are a symptom of bankruptcy.

Ray Morgan and Gillian Ford should beg government for the freedom to set Havering’s Council Tax.

Notes

1 BBC Budget 97 “In his first [1979] Budget he raised VAT from….8% to a single rate of 15%….an increase in prescription charges from 20p to 45p and a major relaxation of exchange controls.” In the same budget higher rate taxation was reduced from 60% to 40%.

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

3 Havering launches new library strategy | London Borough of Havering

4 £1 in 2010 → 2024 | UK Inflation Calculator (in2013dollars.com)

5 House Prices in Hornchurch (rightmove.co.uk) 11 Ravensbourne Crescent, Romford increased 142%. 17 Ravenscourt Grove, Hornchurch increased 117%

6 Previous years’ bands | Council Tax bands and bills | London Borough of Havering Using Band D.

7 Cabinet agrees “toughest budget ever” | London Borough of Havering The actual out-turn won’t be £32M because much expenditure is demand led and not quantifiable accurately.

8 Matthew 25:29