Last week, Tory councillors voted to grant Basildon Council permission to ‘invest’ millions of pounds of our money raised through taxation on property investments with no scrutiny process: Basildon Council grants itself the power to spend millions on property investments without any scrutiny. This move is one of the responses councils across the country are making to government slashing the funding they allocate to local authorities. These funding cuts are part of the ongoing process of implementing seemingly never ending austerity.
Here’s the kicker, while this wave of speculation by local councils is aimed at making them self funding as a means of offsetting the slashing of funding from central government, the money to buy the properties comes in the form of loans from an obscure Treasury offshoot known as the Public Works Loan Board. So, supposedly there’s no money to help fund the day to day expenditure of local authorities that enables them to run the services we rely upon but there’s money available to lend to the aforementioned authorities for property speculation. Seriously, you couldn’t make this up!
As far back as last year, there were warnings that this practice would be loading up massive problems for the future if the economy was to falter in any way: Why local councils are loading up on debt. Well, with the likelihood of a no deal Brexit increasing day by day leading to economic chaos, not to mention changes in shopping habits that are already decimating the retail sector, speculation in property is becoming an ever more risky proposition. Somehow, that doesn’t seem to have sunk in with the Tories at Basildon Council who voted to go ahead with this speculation. They really are living on a different planet to the rest of us mere mortals.
This is yet another example showing that the system of local and national governance we’re forced to endure is not fit for purpose. The government is forcing local authorities to become property speculators and too many local authorities are happily embracing this approach without any question. When you look at the performance metrics of many local authorities, they’re failing. Would you trust them with investing your money in an increasingly unpredictable, volatile and risky economic climate? No, of course you wouldn’t.
A lot of councils are already dangerously exposed to risky investments that will crumble to dust when the next, inevitable economic crisis strikes. The response to that from whoever may be running the country will be yet another, even more brutal, round of austerity. This can’t go on, it’s time we mounted a serious challenge to a system that’s in crisis.