Leicester City Council bankruptcy?

[CosbehFox]

If you are taking into account the income generating culture premises, you have to acknowledge Leicester also has three large museums which are free to enter. Plus a couple of significant landmarks which require maintenance but can’t even have anyone go in them. Throw in the huge museum stores at Freemans Common which require temperature control etc. 

 

Thats just one sector alone. Libraries another example of free service which costs to run. 
 

 

 

Edited 30 October 2023 by CosbehFox

[CosbehFox]

19 hours ago, jammie82uk said:

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 

A lot of those properties you speak of there is no market appetite for renting such space. Anything but warehouse space is struggling to shift at the moment. 
 

It’s a tough gig cos councils feel a responsibility to go below market rate to fill them but then get burnt in five years time when the market rents have increased. The majority of councils own city centre offices and retail units - which simply lose money currently without major capital investment to alter or adapt their use. Affluent town centres near where I used to live - Solihull and Sutton Coldfield look bad currently but other areas to those towns are flourishing. 
 

Some councils are far better at the commerical property game. LCC didn’t use their cash reserves appropriately in that sense. 

Edited 30 October 2023 by CosbehFox

[Finnegan]

On 28/10/2023 at 16:13, 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.

 

Translation: @Alf Bentley you can take that extensively researched and intelligently summarised argument and stick it up your arse because, anecdotally, BlueBrett knows all local authorities are corrupt.

 

Jesus fvcking christ. 

 

It baffles me that it's 2023 and people are finally starting to see this Tory government for what it is - incompetent and self serving - yet bizarrely people still have this weird blind spot for local councils. 

 

They've been treated the same way as Trade Unions for decades now in the media, this constant erosion and undermining of public confidence largely because the Tories just want to be able to sell everything off and stamp out all government without public outcry. 

 

Public perception of councils is always hilariously miles off the mark. Yeah they're not flawless, no business is, wherever you live I guarantee your local council has probably made the odd stupid decision or wasted money but then find me a business that hasn't. 

 

As @westernpark has just alluded to, the simple truth is that there's a greater need than ever for council services right now (the REAL council services, the important shit, the stuff most of you ignore because it's not roads and bicycle paths - housing, social services, the shit that actually protects the most vulnerable residents) and yet at the same time they've never had so little money to do it because central government are assassinating their budget every year by massive amounts.

 

Not that Rishi is going to care because the grandmother with dementia, the severely learning disabled and the rough sleeping addicts with complex needs? They don't tend to vote. 

 

[CosbehFox]

When I worked for LCC, if anything the staff were so over cautious about accepting anything perceived a bribe by third parties that they wouldn't even accept a cup of tea. The perceived corruption because of a few bad eggs - it's worth remembering Leicester has 54 councillors in total. 

 

Equally the scare of privatisation is a total myth as well. Birmingham City Council privatised a number of their services - staff were TUPE'd over to private employers. They equally spent a lot of money on private consultants from very well established, world known consultants and companies. In the case BCC they put a full tender out for their Building Commercial Services - no organisation would take it as a whole. Was a financial loser yet the council still needed to maintain hundreds of buildings. 

 

As Finners says though, that's part of the Council what can make money and can deliver - but there are simply areas which need greater funding and they are simply part of a service we which contribute in tax towards. 

Edited 30 October 2023 by CosbehFox

[filthyfox]

All Local Authorities are struggling.  This is where Tory austerity have chewed and chewed and chewed.

[Tommy G]

On 28/10/2023 at 12:44, David Hankey said:

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

He's probably on about £80K a year which isn't a big fat salary for all the guff he will have to get involved in. Noone goes into public office to earn good money. 

[Footballwipe]

There's so much nuance to local government finance and a few in here are showing the ignorance that leads to this issue sometimes.

 

Simple fact is when costs for critical services increase like SEN transport, adult social care, children's social care, SEN plans etc and the council doesn't get a penny more from the government to achieve it, this is what happens.

 

I think a lot of the time also these very expensive services are ones only a few use. So whilst millions are spent a year on fostering, adult social care, hundreds of pounds a week on one child's SEN transport - many aren't exposed to this, see it or understand it. So it just becomes not fixing potholes or collecting the bins often enough.

 

Yes, your council tax will go up next year and you'll get less for it... because councils are doing what they need to do to be able to afford carrying on at a base level, and even that is becoming harder and harder.

 

It's not about Labour or Conservative or Lib Dem or Green (though you'll see that weird blame game) this is about local councils being underfunded and stripped back to the point they're collapsing.

Edited 30 October 2023 by Footballwipe

[westernpark]

25 minutes ago, Tommy G said:

He's probably on about £80K a year which isn't a big fat salary for all the guff he will have to get involved in. Noone goes into public office to earn good money. 

I think he even reduced his salary when took the role, initially.

[Tommy G]

32 minutes ago, Footballwipe said:

There's so much nuance to local government finance and a few in here are showing the ignorance that leads to this issue sometimes.

 

Simple fact is when costs for critical services increase like SEN transport, adult social care, children's social care, SEN plans etc and the council doesn't get a penny more from the government to achieve it, this is what happens.

 

I think a lot of the time also these very expensive services are ones only a few use. So whilst millions are spent a year on fostering, adult social care, hundreds of pounds a week on one child's SEN transport - many aren't exposed to this, see it or understand it. So it just becomes not fixing potholes or collecting the bins often enough.

 

Yes, your council tax will go up next year and you'll get less for it... because councils are doing what they need to do to be able to afford carrying on at a base level, and even that is becoming harder and harder.

 

It's not about Labour or Conservative or Lib Dem or Green (though you'll see that weird blame game) this is about local councils being underfunded and stripped back to the point they're collapsing.

As a recipient of a SEN transport personal budget I can assure you it's not hundreads a week, or even a month. The amount you receive is piffling

[Guest BlueBrett]

On 28/10/2023 at 17:29, Alf Bentley said:

 

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).

 

 

You are right, I didn't read the report before my previous post. I didn't think data about spending power or funding mechanisms was all that relevant to what I was trying to say. My comments about the way these conversations are framed was really more of an adjacent point rather than an attempt to dismiss anything you said.

 

When I said spending more money is a negative I was being lazy with my phrasing I suppose. I was trying to say that 'value' cannot be assessed by looking at a number. Obviously there are far more pertinent and interesting metrics that should be discussed instead but those discussions rarely seem to take place and even when they do they are invariably overly politicised, disingenuous and reliant on dubious cherry picked data. 

 

I probably shouldn't have brought corruption into it. Like you say, I have no real proof and I suppose doing so just muddies the waters. I don't think my arguments against big government rely on demonstrating corruption anyway. Sure, there are countless examples of private companies doing truly heinous things but I'd suggest that there is far more accountability in the private sector, not to mention immeasurably more talent, innovation and expertise. There is also a mechanism in place to weed out bad actors in the private sector - the free market (to the extent that it exists any more). No such mechanism exists within government. I know in theory this is supposed to be the one of the functions of elections but are they actually effective in doing so? Not in the slightest as far as I can see. I know there are a lot of Tory haters on the forum and I can understand why. For the record, I have never voted conservative and I never will. I'm sorry to break it to you though guys but Labour are just as bad. The only differences between them on the vast majority of issues are cosmetic and rhetorical. I know that's going to make people mad and some will probably go scurrying off to dig up examples of disagreements which undeniably do exist, but all within the parameters of an ever shrinking and leftward shifting overton window.

 

My views are definitely not as straightforward as "private good, public bad..." and I am certainly not happy with the state of the nation. It upsets me greatly to see the UK plummeting down the various indices that track things like quality of life etc. I saw one the other day that had us outside the top 30 with several Baltic former Soviet satellites and a number of Middle Eastern countries outperforming us. Certainly we face some really significant macro challenges but we also have some major strategic advantages that we seem determined to squander. Our decline is not inevitable but is certain to continue whether under the current Tory government or a Labour one. I don't claim to have answers but I am damn sure they aren't going to come from either of the two main parties.

 

I am 35 years old and when I think back over my life I struggle to think of a single achievement of any British government throughout that time. The smoking ban I suppose would be about the most significant successful government led initiative. What else have they done for us? Genuine question. As you point out, it kind of seems like many things just get worse and worse and the wellbeing of the British people doesn't seem to be a priority or even a consideration at times. The few societal changes we have seen throughout my life, even all the 'social justice' stuff that innumerable politicians like to try to take credit for, have been brought about more by populist movements dragging the State along kicking and screaming behind them rather than by inspirational political leadership or reasoned debate.

 

I don't think I'm dogmatic and I'm the furthest thing from an idealogue. My feelings about big government stem from an honest reflection on the observations and experiences of my life so far and my best attempts to think things through for myself. Obviously I'm working with an incomplete data set as we all are and of course my interpretations are debateable and may well be misguided but I can promise you I try to think and talk about these things in good faith. 

 

I have read through the info in the link now and while there are some interesting details I'd suggest, big surprise, that the framing is misleading. For example: 

 

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). 

 

Aren't comments like this kind of disingenuous? It makes it sound like the government has 'cut' almost 20 Billion from the grants to local authorities. They literally use the word 'cut' but this is essentially just a lie. The data tracks "spending power" and we all know (can I say that this time?) that inflation has been astronomical throughout this period - not talking about CPI bullshit I'm talking about actual inflation. I feel like it's safe to say the majority of this 40% reduction in spending power is the result of inflation - largely caused by nonsensical government policies but let's not get into that can of worms today. I can't be bothered to dig up GDP stats etc but it feels like this reduction in "spending power" was pretty much inevitable given the backdrop of high inflation and a relatively stagnant economy. To avoid it, real terms spending would have had to go through the roof and where is that money supposed to have come from? Your link also acknowledges that council tax increased throughout this period which was obviously the government's attempt to make up some of the shortfall without digging into central reserves (if indeed we even have any central reserves ).

 

Anyway doesn't it seem like a weird way to go about funding local councils? Why do we pay council tax but then also pay tax to a central government which then distributes a portion of that tax back out to local councils through grants? How does that make sense? It seems like the only feasible rationale for administering things in this overly bureaucratic and obviously inefficient manner is to centralise control purely for the sake of centralising control.

 

Local government in England has limited revenue-raising powers compared to other wealthy countries. In 2018, every other G7 nation collected more taxes at either a local or regional level.¹ 7% of the UK's taxes were collected, or intended to be collected, locally in 2014, compared to 12% collected locally or federally in Italy, 32% in Germany, and almost 50% in Canada.

 

This was the most interesting section of the review for me. If we have to have government involved in every aspect of our day to day lives for some reason then let's at least shift to a more localised model of funding. Surely it would be a far more efficient approach and resources could be targeted far more deliberately by people who understand the locality while simultaneously, at least partially, alleviating some of my concerns about accountability.

 

 

[David Hankey]

2 hours ago, Tommy G said:

He's probably on about £80K a year which isn't a big fat salary for all the guff he will have to get involved in. Noone goes into public office to earn good money. 

Perception isn't it. You see one way, me another. I wouldn't have minded a salary half that size.

 

It's a gravy train for many with the salary plus allowances and expenses.

 

The fact of the matter is, if you remember, this position was foisted on the citizens of Leicester who were never given a vote as to whether they wanted it or not. 

 

it was on at the behest of 40 odd Labour Councillors that this position should be adopted. 

 

It wouldn't be so bad but Soulsby can and has had more years in Office than arguably one of the most powerful persons in the world, the President of United States.

 

 

[Alf Bentley]

5 hours ago, BlueBrett said:

I'm sorry to break it to you though guys but Labour are just as bad. The only differences between them on the vast majority of issues are cosmetic and rhetorical. I know that's going to make people mad and some will probably go scurrying off to dig up examples of disagreements which undeniably do exist, but all within the parameters of an ever shrinking and leftward shifting overton window.

 

I am 35 years old and when I think back over my life I struggle to think of a single achievement of any British government throughout that time. The smoking ban I suppose would be about the most significant successful government led initiative. What else have they done for us? Genuine question. As you point out, it kind of seems like many things just get worse and worse and the wellbeing of the British people doesn't seem to be a priority or even a consideration at times. The few societal changes we have seen throughout my life, even all the 'social justice' stuff that innumerable politicians like to try to take credit for, have been brought about more by populist movements dragging the State along kicking and screaming behind them rather than by inspirational political leadership or reasoned debate.

 

Thanks for your thoughtful, considered response. I've not got much time - and will have even less in the coming days - so will respond to select points. That's for the best, anyway, as it's supposed to be about council bankruptcy, not wider politics.

 

Some achievements of the last Labour Govt: a seemingly impossible peace in N. Ireland; minimum wage (I earned £2.75/h for bar work in 1994); equal age of consent; Sure Start family support; slashing of NHS waiting lists; major investment in school infrastructure; improved living standards for the poorest 10%; reduction in homelessness. To be balanced, they also did bad stuff: Iraq War, wasteful PFI schemes, inadequate banking regulation.

 

Some achievements of the Tories (trying to be fair): equal marriage rights; vaccine roll-out; prominent role over Ukraine. I'm sure Tory supporters would also claim "getting Brexit done". I wouldn't see Brexit as a great achievement and you'd correctly claim it was due to populist movements, but Cameron facilitated it & Johnson played a key role in winning the vote.

 

Not only have both govts achieved stuff, I'll also scurry in and say that there are major differences between the two, especially when you look at the state of the nation now (I'm talking public services, poverty, inequality etc.)

 

5 hours ago, BlueBrett said:

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). 

 

Aren't comments like this kind of disingenuous? It makes it sound like the government has 'cut' almost 20 Billion from the grants to local authorities. They literally use the word 'cut' but this is essentially just a lie. The data tracks "spending power" and we all know (can I say that this time?) that inflation has been astronomical throughout this period - not talking about CPI bullshit I'm talking about actual inflation. I feel like it's safe to say the majority of this 40% reduction in spending power is the result of inflation - largely caused by nonsensical government policies but let's not get into that can of worms today. I can't be bothered to dig up GDP stats etc but it feels like this reduction in "spending power" was pretty much inevitable given the backdrop of high inflation and a relatively stagnant economy. To avoid it, real terms spending would have had to go through the roof and where is that money supposed to have come from?

 

No and No again...

1) The article defines what it means by "real terms": all figures quoted at 2023-24 prices. "Real terms" specifically means they've adjusted earlier figures to allow for inflation - so that they're comparing equivalent figures. So they ARE saying that the Govt has cut almost £20bn from local authority grants, based on inflation-adjusted figures.

2) Inflation was NOT astronomical between 2009-10 and 2019-20. It was between 0.5% and 4% per annum. It has only been astronomical SINCE then, in the wake of Covid, Truss and particularly Ukraine (impact on fuel/food prices)

 

5 hours ago, BlueBrett said:

Your link also acknowledges that council tax increased throughout this period which was obviously the government's attempt to make up some of the shortfall without digging into central reserves (if indeed we even have any central reserves ).

 

Anyway doesn't it seem like a weird way to go about funding local councils? Why do we pay council tax but then also pay tax to a central government which then distributes a portion of that tax back out to local councils through grants? How does that make sense? It seems like the only feasible rationale for administering things in this overly bureaucratic and obviously inefficient manner is to centralise control purely for the sake of centralising control.

 

For many years, the Govt sought to limit local authorities increasing Council Tax for ideological reasons. They're allowing bigger increases now, partly due to crisis in the care sector, but perhaps partly for electoral reasons, knowing that voters will blame their local council for the increases, not central govt. To an extent, that's fair, as it is the councils who put up Council Tax, not the Govt - but they're doing so to offset a budgetary crisis caused by rising needs combined with large cuts in central govt grants.

 

Central govt grants to local councils make sense because councils are not equal in either needs or the ability to tax their local populations. Areas that are high in poverty, have a lot of elderly or a lot of children will have higher needs than areas mainly inhabited by healthy people of working age. Likewise, both property prices and incomes vary widely depending on area/demographics. Not only will some deprived cities and OAP-dominated coastal towns have much higher needs than the stockbroker belt, they will also have less ability to pay - much lower disposable incomes where there are lots of pensioners, kids or people on low pay.  

 

5 hours ago, BlueBrett said:

Local government in England has limited revenue-raising powers compared to other wealthy countries. In 2018, every other G7 nation collected more taxes at either a local or regional level.¹ 7% of the UK's taxes were collected, or intended to be collected, locally in 2014, compared to 12% collected locally or federally in Italy, 32% in Germany, and almost 50% in Canada.

 

This was the most interesting section of the review for me. If we have to have government involved in every aspect of our day to day lives for some reason then let's at least shift to a more localised model of funding. Surely it would be a far more efficient approach and resources could be targeted far more deliberately by people who understand the locality while simultaneously, at least partially, alleviating some of my concerns about accountability.

 

 

 

I'm quite sympathetic to your point here. It would certainly be more democratic and probably, as you say, more efficient to have more tax-and-spend decisions devolved to local govt.

 

However, for the reasons given under the previous point, there would need to be some mechanism for redistribution from areas with high disposable incomes and/or low needs to areas with low disposable income and/or high needs. Otherwise, the stockbroker belt would easily be able to afford lush, possibly superfluous local public services, while retirement towns and low-income cities would struggle to collect enough local tax to fund much greater needs: i.e. you'd risk exacerbating already growing inequality.

 

Over and out, I'm afraid (very busy in coming days).

 

Edited 30 October 2023 by Alf Bentley