Council is broke

noodle_doodle

michaels wrote: »

Really???????

It may even be the same council, but Carlisle City council took a £15 mil interest only loan at 8.75%

http://www.newsandstar.co.uk/news/carlisle-council-s-500-000-a-year-loan-interest-frustration-1.853124

fixed for TWENTY_FIVE years :-o


Add on the weight of possible long-term PFI liabilities attached to councils, and going bust seems the logical free enterprise thing for councils to do.

Of course there is no guarantee the high heid yins will keep their posts in a phoneix council and they're the ones who make the decisions...

vivatifosi

Generali wrote: »

I reckon the council should be trying to provide the best service at the lowest cost: providing value for money.

My guess is that outsourcing to a large call centre firm provides a lower cost outcome than providing services themselves. Call centres are pretty efficient at handling large volumes of calls, a skill that it seems unlikely for a council to have as it's pretty specialised.

Actually, the cheapest way to get information from the government is from a website. So really you want people to do stuff on line.. This might be checking when the bin collection will be (including any special times over Christmas), telling the council that there's a pothole in your road, making a payment of some sort, renewing a library book... Next cheapest is a call centre. Public facing is the most expensive option.

In spite of this, how many people have experienced broken links on their local council website, or they don't have the info that you need? Call centres should be monitoring their most common enquiries so that these can be included in easily accessible FAQs.

There's also nothing to stop a council running their own call centre if the operators need to be trained to specific standards.. It is still cheaper than face to face enquiry handling and that way the council could still employ people in Brent (or wherever). My local council handles its housing enquiries this way.

globalds

I grew up in Wolverhampton and have said for a long time it is a town that's caretakers make some of the worst decisions I have witnessed.

The two big shopping centres on the doorstep Merry Hill and Telford have succeed in taking trade consistently from the city And any attempts to do anything constructive for the city have been at the expense of shops, shoppers and the shopping experience which is dire now.
The moment will soon arrive when Beatties/House of Fraser will remove itself from the town ..then you really will see a hollowing out.
The city road network of arterial routes is shocking with no regard to users and has been considered almost totally on the North western side by nimbys who have kept there privilege at the cost of development.
The Midlands in general has been badly lead and it's disunity has shown in lack of real infrastructure A tram line is the only thing we have compared to London's underground..and instead of an M25 we get to pay to go North around the cities with a toll road that is the real route of an orbital motorway ..

I am glad JLR has decided to develop it's site close to Wolverhampton at I54 ..But I think development is headed along the M54 and not back towards Wolverhampton ..I Hope I am wrong and development helps the town back on it's feet.

globalds

vivatifosi wrote: »

Actually, the cheapest way to get information from the government is from a website. So really you want people to do stuff on line.. This might be checking when the bin collection will be (including any special times over Christmas)

I actually used this service over Christmas ..It was so cool I even commented to the family On something really simple that worked just how you needed it
type in your house number and postcode and the right day comes back
http://crmonlineforms.telford.gov.uk:8080/TelfordServiceForms/ServiceForms/PropertyServices/refusecollectionenquiry.aspx

[Deleted User]

theres one trick alot of mbc`s have missed,every ward has 3 councillors and usually 40+ wards they could easily reduce them to 2 per ward and save the cost of 40 councillors a substantial saving over a few years

gazter

michaels wrote: »

Really???????

Yes.

Its even worse. Will give you the full history.

My area had a housing estate which was in significant decline for a number of reasons, largely due to the proliferation of anti social behaviour and an unwillingness/inability to enforce tenancy agreements. The place became an area people refused to move to it started to depopulate. In order to halt the decline the Council borrowed £15 million at a 9% fixed rate (yes, fixed, as the capital never reduces, the amount never reduces), interest only. The rate was fixed for the entire 25 year term. Early repayment penalties equate outweigh any advantage in paying early.

The money was spent improving the local built environment and updating the properties with central heating, double glazing, carpeting and decorated.

The intention was to make the area more attractive. It didnt work, the houses were soon stripped by local scallies and the place was eventually bulldozed.

Now here's the wheeze. The cost of the loan (£1.3 million pa) fell on the Housing Revenue Account (HRA). The HRA was a gigantic pot of central government funding distributed to councils to maintain social housing. The sums were so large that the HRA was more than twice the size of the council's own non housing related budget.

For councillors the problem with the HRA is that it is ringfenced. It can only be used on housing related matters. It is seen as 'other peoples money', central governments money. Much of the council's resources was directed at extracting the maximum it possibly can out of this HRA. Over charging of works (council being the only contractor), over egging central costs. Any activity that could be legally pushed onto the HRA would be.

The irony is of course, that when the HRA was set up it was ringfenced to stop councils raising council tax to keep rents low. But in fact what we had was the tenants getting robbed blind, with their resources getting top sliced to keep the council tax low.

Back to the point. This loan was charged onto an account that comes not from money they after raise. So care less, they couldnt.

When the council transferred its housing to a housing association, the over hanging debt borrowed against the houses was cleared (An entirely different £15 million), but this debt was not borrowed against the housing so wasnt cleared, and with no HRA, the £1.3 million now drops onto the general fund, the council tax payer.

In 2020 the term will end. The council would have paid £32,500,000 to borrow £15,000,000 and will immediately need to write out a further cheque for £15,000,000 or take out another loan.

The councillors who took that decision still claim it was a good decision, and that since the money originally fell on the HRA not local residents, what does it matter?

grizzly1911

gazter wrote: »

Yes.

Its even worse. Will give you the full history.

My area had a housing estate which was in significant decline for a number of reasons, largely due to the proliferation of anti social behaviour and an unwillingness/inability to enforce tenancy agreements. The place became an area people refused to move to it started to depopulate. In order to halt the decline the Council borrowed £15 million at a 9% fixed rate (yes, fixed, as the capital never reduces, the amount never reduces), interest only. The rate was fixed for the entire 25 year term. Early repayment penalties equate outweigh any advantage in paying early.


The councillors who took that decision still claim it was a good decision, and that since the money originally fell on the HRA not local residents, what does it matter?

Any idea where they borrowed the money from for each loan?

gazter

grizzly1911 wrote: »

Any idea where they borrowed the money from for each loan?

public works loan board

lemonjelly

seven-day-weekend wrote: »

Thank you all for your informative and interesting comments.

I live in Wolverhampton, in fact I used to work for the City Council and am due to draw my Pension from there later this year:eek:

The city centre is terrible. There are empty shops, derelict buildings, schemes that are promised don't come to pass because there is not enough private investment. I think the last new build within the ring road was our church building which took over a derelict Goodyear tyre depot.

http://www.expressandstar.com/news/2011/02/02/new-church-approved-for-chapel-ash-site/

We do however have the largest Poundland in the country.:)

Jaguar/Landrover have relocated to the outskirts of the town, but it is Tory South Staffs Council (which adjoins Wolves) that have mainly engineered this.

I think the Council has been mismanaged for years under Labour control. I worked for it during the Tony Blair years (1996-2004) and of course the Labour Government kept it topped up financially, so they have got used to that level of spending.

I fear for my city, I really do. Traditional industry has disappeared. I see it sinking into decline and don't know what to do.

Good post & summary. Agree with much of this, & also the comments made by grizzly.

globalds wrote: »

I grew up in Wolverhampton and have said for a long time it is a town that's caretakers make some of the worst decisions I have witnessed.

The two big shopping centres on the doorstep Merry Hill and Telford have succeed in taking trade consistently from the city And any attempts to do anything constructive for the city have been at the expense of shops, shoppers and the shopping experience which is dire now.
The moment will soon arrive when Beatties/House of Fraser will remove itself from the town ..then you really will see a hollowing out.
The city road network of arterial routes is shocking with no regard to users and has been considered almost totally on the North western side by nimbys who have kept there privilege at the cost of development.
The Midlands in general has been badly lead and it's disunity has shown in lack of real infrastructure A tram line is the only thing we have compared to London's underground..and instead of an M25 we get to pay to go North around the cities with a toll road that is the real route of an orbital motorway ..

I am glad JLR has decided to develop it's site close to Wolverhampton at I54 ..But I think development is headed along the M54 and not back towards Wolverhampton ..I Hope I am wrong and development helps the town back on it's feet.

What worries me, is the potential in the city not being used.

The worry is that Wolverhampton could end up like walsall has. Walsall, through council mismanagement, & even corruption, has been neglected & allowed to die.

I disagree that Merry Hill has taken too much away - I think a lot of locals actually dislike merry hill, though it is seen as a viable day out for many at the same time.

For me, the city centre developed too many drinking establishments, leading to over saturation as well as too many inebriated people resulting in a lot of people (myself included) actively avoiding the centre. A shames, as facilities like the civic hall are superb!

Something really innovative needs to happen in the city centre. After 10+ years of wrangling & legal debate, they are finally building/developing 2 new supermarkets on the outskirts of the city centre. The old clarks car centre in chapel ash has been due to be upgraded for years, with no movement, & the eye infirmary closing has made that section terrible too. If nothing happens to these areas quickly, these will go downhill very fast.

daveyjp

woodbine wrote: »

theres one trick alot of mbc`s have missed,every ward has 3 councillors and usually 40+ wards they could easily reduce them to 2 per ward and save the cost of 40 councillors a substantial saving over a few years

Except that is not a decision a local Council can make. Councillor numbers are a national constitutional issue so needs a national decision. I have heard no one in Govt arguing for a reduction in councillor numbers.