Our system detected that your browser is blocking advertisements on our site. Please help support FoxesTalk by disabling any kind of ad blocker while browsing this site. Thank you.
Jump to content
David Hankey

Leicester City Council bankruptcy?

Recommended Posts

It seems Leicester City Council are heading the same way as Birmingham and other Councils in filing for a Section 114 Notice which essentially declares it bankrupt within the next 2 years.

 

Soulsby has written to the Government wanting more financial help from them despite having £66M in reserve at March 2023.

 

It looks to me this will lead to a complete re-organisation and reform of local government from County, City, District and Parish Councils.

 

I'm sure these Councils would not squander taxpayers' cash if it were their own.

 

 

Link to comment
Share on other sites

7 minutes ago, David Hankey said:

It looks to me this will lead to a complete re-organisation and reform of local government from County, City, District and Parish Councils.

Not if Soulsby has anything to do with it.

 

https://www.leicestermercury.co.uk/news/leicester-news/city-mayor-faces-fresh-backlash-7529039

 

City Mayor faces fresh backlash as £1bn East Midlands deal signed without Leicester or Leicestershire
The city mayor has been accused of blocking a similar deal locally


ByHannah RichardsonLocal Democracy Reporter
07:28, 1 SEP 2022

 


A £1.14 billion pound deal was agreed for the East Midlands this week – but the city and county will not see a penny of it. Leaders from Derby, Derbyshire, Nottingham and Nottinghamshire and the Levelling Up Secretary of State, Greg Clark, signed a deal this week which will grant them greater funding for transport, housing and skills training.

The new combined authority, known as D2N2, will receive £38 million over 30 years under the Government’s Levelling Up Agenda. It will also have greater decision making powers to deliver on local priorities such as education, transport infrastructure and development.

The move will require one elected mayor to be appointed for the four authorities.

 

 

In light of the signed deal, Leicester’s city mayor, Sir Peter Soulsby, has again been accused of blocking the county from receiving a similar level of funding. The county council has both been invited to work out its own deal for Leicester, Leicestershire and possibly Rutland, or join the D2N2 deal.

But the county has said it would not take the step towards a new union without the city council and Leicester has opposed both opportunities because they would require the councils to unite as an economic area with a directly elected mayor over the current leadership. Sir Peter, has previously described the idea of a new mayor’s office as ‘daft’.


Level two and level one deals remain open for the area. But none of these involve similar amounts of funding.

Conservative leader of Harborough District, Phil King, has accused the city mayor of ‘blocking’ the chance for funding. He took to Twitter after the D2N2 deal was announced to say: “Leicestershire districts are seething at this as we are being made to pay for city mayor and Labour Party blocking [it].”

Sir Soulsby said: “Leicester has had an elected mayor for 11 years and I can understand why Nottingham and Derby feel that they are missing out. Although the figures that are being claimed will come from this part of the Government’s Levelling Up deal do sound big, in fact they are in proportion to what Leicester has been achieving already.”

Conservative councillor for Kibworth Ward, Simon Whelband, also expressed his disappointment that Leicestershire councils were not included. “Great news for our region,” he said, “[it’s] just a shame the city mayor is acting as a roadblock so Leicester, Leicestershire and Rutland [are] not included. Blocking serious investment in our area.”

Sir Peter Soulsby has previously said the £1 billion figure expected to be received through a local deal was ‘pure illusion’ as the Government ‘hasn’t promised a single penny’. He added: “There is much scepticism about the costs of having yet another tier – elected over the top of the district councils and the county council – who already work very well together and with the city.”

Leicestershire County Council had hoped to use the money from its own bid to create a Better Care Fund for children and young people – an ‘innovative’ scheme to pool up to £200 million from clinical commissioning groups, local authorities and the NHS to create more joined up care. Planned improvements to road infrastructure, broadband provision and bus funding can also no longer go ahead.

As the deals are worked out based on funding per head, had Leicestershire joined D2N2, the pot of money would have likely been higher than the current agreement. Coun King estimated this would add around £600 million to the pot.

A spokesperson for the county council said: “The city of Leicester is geographically at the centre of the county and the strategic interdependencies of transport and the inter-relations of many public services would need to be recognised in any form of combined authority. It would not be sensible to separate them if one council was in a combined authority and not the other.

“If this is a conclusion recognised by the Government, it is up to them to do something about it through legislation if they or other interested parties want a combined authority covering the three cities and the three counties. It would also be wrong if a decision was made to provide more funding and investment opportunities to the D2N2 area when they are not being made available to Leicestershire residents and businesses.”

While the deal has been signed, Parliament still needs to approve of the Levelling Up and Regeneration Bill and necessary secondary legislation, as well as a public consultation. The D2N2 combined authority is expected to hold mayoral elections in 2024.

Levelling Up Secretary Greg Clark said of the deal: “The East Midlands is renowned for its economic dynamism and it has the potential to lead Britain’s economy of the future. For a long time I have believed that the East Midlands should have the powers and devolved budgets that other areas in Britain have been benefitting from and I am thrilled to be able to bring that about in Derby, Derbyshire, Nottingham and Nottinghamshire.

“I am impressed by the way councils in the region have come together to agree the first deal of this kind in the country, which will benefit residents in all of the great cities, towns and villages across the area of Derbyshire and Nottinghamshire.”

  • Like 1
Link to comment
Share on other sites

33 minutes ago, David Hankey said:

No doubt, Soulsby is thinking of his big fat salary and pension before anything else.

I think it's more to do with the 'power' he'd be losing as I'd doubt very much he'd win any East Midlands Mayoral position. He'd be stuck with just the City and a lot less money. 

 

 

  • Like 4
Link to comment
Share on other sites

I didn't realise that Leicester City Council veto'd it. Having listened to the rest is politics podcast with Burnham and Street, it's absolutely insane that they refused to be in an East Midlands Combined authority. We will be completely left behind all through greed, while you'll see Nottingham and Derby thrive.  

Link to comment
Share on other sites

1 hour ago, David Hankey said:

I'm sure these Councils would not squander taxpayers' cash if it were their own.

I agree, I’m not sure how the city can go bankrupt without there also being reckless spending, the city council has a decent income stream, £1 million profit on a below capacity Haymarket shopping centre, income from Demontfort Hall, Richard iii centre, we have a theatre they are currently not using, the council own over £100 million in properties of which they receive a rental income from for many of them, we also have a list of long term empty properties that would obviously be advantageous if they could rent them out 

  • Haha 1
Link to comment
Share on other sites

Guest BlueBrett
1 hour ago, Alf Bentley said:

In all honesty, I've little idea whether Soulsby or Leicester City Council have managed finances well or badly. I suspect that may apply to others....or maybe they've conducted detailed analysis proving financial waste/incompetence.

 

But I suspect there are bigger reasons why multiple councils (both Labour and Tory) are going bankrupt up and down the country. Years of cuts in central govt funding is certainly part of it - though some councils have lost millions on rash speculative investments designed to offset cuts in central govt support. This is all at a time when many needs are rising (more elderly & kids needing care, school absenteeism, homelessness etc.)

 

Here are some excerpts from a good but brief summary by people who HAVE done some research: https://www.instituteforgovernment.org.uk/explainer/local-government-funding-england

 

"Local authority ‘spending power’ – the amount of money authorities have to spend from government grants, council tax and business rates – fell by 17.5% between 2009/10 and 2019/20, before partially recovering. However, in 2021/22 it was still 10.2% below 2009/10 levels. [...] The fall in spending power is largely because of reductions in central government grants. These grants were cut by 40% in real terms between 2009/10 and 2019/20, from £46.5bn to £28.0bn (2023/24 prices)".

 

"Upper and single tier authorities have faced particular difficulties because of rising demand for social care, even though since 2016/17 they have been allowed to increase council tax rates more quickly. Social care is a statutory responsibility – that is, local authorities are legally obliged to provide it – and so they have protected spending on social care for children and adults, often at the expense of other services, such as libraries and road maintenance".

 

"Cuts also fell more heavily on more disadvantaged local authorities. The most deprived local authorities experienced the largest falls in spending power between 2010/11 and 2019/20. This is because of the way that central government allocated funding cuts. [...] Most recently, the Sunak government used the 2023/24 finance settlement to claim that while it “remains committed to improving the local government finance landscape”, it would not implement the findings of the Fair Funding Review in this spending review period, meaning that there will be no change until April 2025 at the earliest".

 

Seriously is worth reading that report - or at least having a quick look at the graphs.

 

Nah! Maybe it's more fun to just blame the messenger/frontman. I'll join in.... "I see Vardy failed to score many last season. I blame him for relegation. Did it deliberately because he's a selfish bastard. Vardy out! Boooo! Soulsby out, er, I mean Vardy out! Booo!!! ":rolleyes:

 

There is a huge framing issue in the way people talk about these things. It's as if more spending equates to doing a better job.

 

Politicians love to talk about 'record levels of investment' and so on as if this means they are the most caring and committed. No other societal domain operates this way. Spending more money is obviously a negative thing in reality, but for some reason the media allows the politicians and officials to frame it as a positive. They even do similar framing themselves with all the talk about 'cuts' and so on as if realigning processes and improving efficiency is somehow impossible and any reduction in expenditure must be due to cold heartedness rather than competence.

 

We all know local government is disgracefully wasteful and corruption is rife, even if we only have anecdotal evidence. The demonization of anything resembling privatisation for no discernible reason other than a vague and erroneous claim that "it ends up being more expensive in the long run" to deliver public services this way is a huge issue too. It's as if the only acceptable solution to anything is MORE state involvement backed by MORE spending funded by INCREASED taxes. How about we try something different and just have wayyyyy less of all of it? I suspect we would be just fine.

Link to comment
Share on other sites

29 minutes ago, BlueBrett said:

There is a huge framing issue in the way people talk about these things. It's as if more spending equates to doing a better job.

 

Politicians love to talk about 'record levels of investment' and so on as if this means they are the most caring and committed. No other societal domain operates this way. Spending more money is obviously a negative thing in reality, but for some reason the media allows the politicians and officials to frame it as a positive. They even do similar framing themselves with all the talk about 'cuts' and so on as if realigning processes and improving efficiency is somehow impossible and any reduction in expenditure must be due to cold heartedness rather than competence.

 

We all know local government is disgracefully wasteful and corruption is rife, even if we only have anecdotal evidence. The demonization of anything resembling privatisation for no discernible reason other than a vague and erroneous claim that "it ends up being more expensive in the long run" to deliver public services this way is a huge issue too. It's as if the only acceptable solution to anything is MORE state involvement backed by MORE spending funded by INCREASED taxes. How about we try something different and just have wayyyyy less of all of it? I suspect we would be just fine.

Two small points on the bolded:

 

- sometimes, such measures are due to exactly that, or at least a lack of concern for the real consequences those measures will have on vulnerable people.

 

- isn't the healthcare system in the US and the utilities and train networks in the UK proof enough of how privatisation alone really doesn't benefit the consumers it is supposed to benefit? A combined solution, like in many European and Far Eastern nations, might be examples to follow.

  • Like 1
Link to comment
Share on other sites

15 minutes ago, BlueBrett said:

There is a huge framing issue in the way people talk about these things. It's as if more spending equates to doing a better job.

 

Politicians love to talk about 'record levels of investment' and so on as if this means they are the most caring and committed. No other societal domain operates this way. Spending more money is obviously a negative thing in reality, but for some reason the media allows the politicians and officials to frame it as a positive. They even do similar framing themselves with all the talk about 'cuts' and so on as if realigning processes and improving efficiency is somehow impossible and any reduction in expenditure must be due to cold heartedness rather than competence.

 

We all know local government is disgracefully wasteful and corruption is rife, even if we only have anecdotal evidence. The demonization of anything resembling privatisation for no discernible reason other than a vague and erroneous claim that "it ends up being more expensive in the long run" to deliver public services this way is a huge issue too. It's as if the only acceptable solution to anything is MORE state involvement backed by MORE spending funded by INCREASED taxes. How about we try something different and just have wayyyyy less of all of it? I suspect we would be just fine.

 

To claim that more spending equates to a better job would be ridiculous, I agree. But to claim that "spending more money is obviously a negative thing" is equally ridiculous.

If you spend more money on decorating your home or moving to a better seat at LCFC is that obviously a negative thing? It might be money wasted, depending on your priorities, but it might be money well spent.

 

Likewise, extra public spending might be wasted or money well invested because it meets social needs or saves money further down the line: e.g. money spent on a white elephant project would be money wasted but extra money spent on care for the elderly might be socially beneficial and might save NHS resources by reducing bed blocking. Money spent on youth facilities might be wasted - or it might be beneficial in helping truants back into school or avoiding them drifting into criminality.

 

I agree that politicians' boasts about "record levels of investment" are meaningless unless the investment is well directed. But likewise, politicians boast about "saving public money", which may be good in some circumstances but may cause social harm in others - an equally meaningless boast unless we know that the money "saved" was being wasted before. A lot of the spending cuts of the last 13 years have been harmful to the country, in my opinion. The efforts to avoid excess spending haven't proved the govt's "competence". 

 

We don't "all know that local govt is disgracefully wasteful and corruption is rife". I don't know that. I suspect most people don't know that - though some will doubtless have encountered particular examples of waste or corruption at local or national govt level. Plenty may believe that local - or national - govt is wasteful and corrupt, based on prejudiced thinking or anecdotal evidence. Anecdotal evidence is of little value compared to proper research and balanced evidence.

 

Returning to the bankrupt councils issue, do you think that councils were squeaky clean a few decades back but are now in financial trouble because councils have suddenly become corrupt? That is the point that I was addressing in my reply earlier. Particular councils or individuals may be corrupt now, as in the past, but greatly reduced funding and increased need are also factors nationwide - as shown by the different types/political affiliations of councils in financial trouble despite major cuts.

 

Re. the "demonization of privatization for no discernible reason"....The privatised water companies have been demonized for pumping sewage into the sea/rivers while making big profits and for planning to jack up water bills in order to fund infrastructure repairs. Hardly demonization - and a definite possibility of it ending up more expensive in the long run. I don't say "public good, private bad", but the opposite isn't true either.

 

Anyway, I'm wasting my time. I posted a link and quotes from a properly researched report, but your reply suggests that you didn't bother looking at any of that. It suggests that you have dogmatic ideological ideas (private good, public bad; tax cuts good, extra spending bad - freedom, innit?) and have no interest in engaging with ideas or evidence that conflict with that.

 

If you feel we would be fine with wayyyy less public spending, you must be delighted at the state of the nation now. The national govt has been doing that for 13 years - slashing public services nationally and slashing grants to local govt for local spending. Yet there seems to be a certain amount of misery and squalour and they've somehow managed to achieve this while increasing personal taxation and public debt (yes, partly Ukraine & Covid....partly also corrupt PPE deals for mates etc.), but hey, what's evidence when you can rely on ideological dogma? Anyway, over and out (unless you bother to address the issues raised in the report linked earlier).

 

 

  • Like 4
Link to comment
Share on other sites

5 hours ago, davieG said:

I think it's more to do with the 'power' he'd be losing as I'd doubt very much he'd win any East Midlands Mayoral position. He'd be stuck with just the City and a lot less money. 

 

 

Can't get your monthly brown envelopes in when there's someone above you. :D

Link to comment
Share on other sites

Good to see Soulsby cracking down on non-essential spending over 5k. That should help sort things out. Shame he didn't bring this in around the time the council gave a 150K to renovate cultural quarter buildings that his daughter opened a bar in: (but that was ok, as a different councilor made the decision, except nobody mentioned the daughter's bar to her)

https://www.leicestermercury.co.uk/news/leicester-news/councillor-i-not-know-mayors-711251

 

All good though, as the council (headed by SPS, also featuring: Assistant mayor one of his other daughters) conducted an independent investigation into itself (remember when Labour was so concerned at a national level about Boris Johnson being investigated by his own employees? Shame they don't practice what they preach on the local level) and found everything hunky dory.

https://www.leicestermercury.co.uk/news/leicester-news/no-evidence-sir-peter-soulsby-758063

 

And it didn't matter anyway, as the bar folded anyway

https://www.business-live.co.uk/enterprise/shock-two-big-leicester-bars-17127466

 

Still, sorted out all that non-essential spending though, so no need to join up with Derby and Nottingham.

 

Edited by orangecity23
  • Like 1
Link to comment
Share on other sites

3 hours ago, westernpark said:

I agree with your grievances re Soulsby but fundamentally this issue is caused by the epoch like rise in the need to fund social care and the lack of financial resources from central government to do so. This council has overall been reasonably financially responsible hence the large amount in reserves but that money will all be gone because of social care bill, ultimately underlining a problem that will engulf generations to come. I like Keir Starmer if not for anything more than I find him honest but Labour’s new manifesto does not do enough to cover this social care funding issue. I don’t want to engage in ideology/political talk, all I want this post to highlight is that social care will be the domestic issue of our time unless at least one mainstream political party engages properly with it.

Oh, I agree absolutely that's a more wide scale issue with social care funding, and it's only going to get worse, the changing of age demographics means there will be big issues funding enough care for the elderly as well, and nobody really has a solution beyond flogging off their houses if they own them - except, that's not a long term solution as in the future we will have more elderly folks who don't own houses outright due to the inflation of house prices in this country. Feels like everything is slowly falling apart really.

 

I was just doing a cheap dig at Soulsby for his posing in the papers as some kind of responsible financial controller.

  • Like 1
Link to comment
Share on other sites

7 minutes ago, orangecity23 said:

Oh, I agree absolutely that's a more wide scale issue with social care funding, and it's only going to get worse, the changing of age demographics means there will be big issues funding enough care for the elderly as well, and nobody really has a solution beyond flogging off their houses if they own them - except, that's not a long term solution as in the future we will have more elderly folks who don't own houses outright due to the inflation of house prices in this country. Feels like everything is slowly falling apart really.

 

I was just doing a cheap dig at Soulsby for his posing in the papers as some kind of responsible financial controller.

Re Soulsby, I think his decision to not engage with an East Midlands mayor role is even more infuriating when we’ve not even had a referendum on Leicester having an actual mayor. I don’t actually think the city council has been bad at all with the finances, this is completely out of their control. Yes there are smaller issues like you’ve mentioned but in 2015 there were huge failings in social work with the council, an assistant mayor stepped down, to only run again and is now assistant mayor again! These instances are indicative of the issue with our local politicians and possibly local politicians nationwide, they’re far too comfortable and it’s the same people on each ballot paper.

Link to comment
Share on other sites

7 minutes ago, westernpark said:

Re Soulsby, I think his decision to not engage with an East Midlands mayor role is even more infuriating when we’ve not even had a referendum on Leicester having an actual mayor. I don’t actually think the city council has been bad at all with the finances, this is completely out of their control. Yes there are smaller issues like you’ve mentioned but in 2015 there were huge failings in social work with the council, an assistant mayor stepped down, to only run again and is now assistant mayor again! These instances are indicative of the issue with our local politicians and possibly local politicians nationwide, they’re far too comfortable and it’s the same people on each ballot paper.

Yes, that Vi Dempster step down at the time seemed strange too. I was shocked she's back at the top again. Seemed very much like a scapegoat, SPS has a habit of putting himself out front and centre every time something goes right, then miraculously having "no knowledge" of anything going wrong (like the massive failings in social care) in the city, even if it's his own assistant mayor's dealing with issues, he makes out like they operate in a vacuum and keep him in the dark.

Link to comment
Share on other sites

22 hours ago, jammie82uk said:

I agree, I’m not sure how the city can go bankrupt without there also being reckless spending, the city council has a decent income stream, £1 million profit on a below capacity Haymarket shopping centre, income from Demontfort Hall, Richard iii centre, we have a theatre they are currently not using, the council own over £100 million in properties of which they receive a rental income from for many of them, we also have a list of long term empty properties that would obviously be advantageous if they could rent them out 

Social care. My partner has a brother in care as he's severely disabled and it costs about £6k a month. Her father is currently self funding for a care home, if and when he runs out of money that shall be another £5000+ per month. So that's £11,000 a month on just two people potentially. 

  • Like 2
Link to comment
Share on other sites

12 minutes ago, orangecity23 said:

Yes, that Vi Dempster step down at the time seemed strange too. I was shocked she's back at the top again. Seemed very much like a scapegoat, SPS has a habit of putting himself out front and centre every time something goes right, then miraculously having "no knowledge" of anything going wrong (like the massive failings in social care) in the city, even if it's his own assistant mayor's dealing with issues, he makes out like they operate in a vacuum and keep him in the dark.

Soulsby and Dempster should have both stepped down at the time. I totally agree with your opinion on Soulsby and I’m glad he’s speaking up now, rather than a week before he applies for which ever section it is for bankruptcy. But the reasons for bankruptcy remain totally with the rising cost of social care, and people(not you) citing the King Richard 3rd centre and other council owned attractions as a good enough income source are laughable. 

Edited by westernpark
Link to comment
Share on other sites

1 hour ago, westernpark said:

and people(not you) citing the King Richard 3rd centre and other council owned attractions as a good enough income source are laughable. 

You could just tag me you know, we are all supposedly adults, I mentioned the council owned attractions as they are Bonuses to what the council already receives as part of its overall income, its a good solid income which can be improved on plus we currently have council business properties that the council estimates around £500,000 rental income sitting empty and that don’t include the Haymarket theatre 

 

I’m also aware of the social care costs as my Grandad had been receiving care for the last couple of years until he recently passed away with dementia 

 

Social care has been long neglected by the powers in charge of this city but they always seems to find money for their vanity projects and back handers for their mates 

Link to comment
Share on other sites

10 minutes ago, jammie82uk said:

 

I’m also aware of the social care costs as my Grandad had been receiving care for the last couple of years until he recently passed away with dementia 

 

Social care has been long neglected by the powers in charge of this city but they always seems to find money for their vanity projects and back handers for their mates 

The issues of social care in this city are largely not a result of neglect by the local authority. The bill is increasing and the funding from central government is not. 

  • Like 1
Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    • No registered users viewing this page.
×
×
  • Create New...