‘By taking out this ‘loan’, Havering is entering into a generational debt’.

 It is my resident’s council tax that will pay for this loan and that pays for us Councillors. They deserve to know as much as anyone else.

Romford Councillor David Taylor today continues his ‘Taylor Talks‘ Column in the Havering Daily.

At Havering’s budget meeting, on Wednesday 28 January, Councillors were informed that the government is ‘minded to approve’ Havering’s request for what is known as a Capitalisation Directive (CD). 

 The CD, which is being referred to as a ‘loan’ by some, will allow us to borrow up to £53m to cover a gap in our budget. £20m of the gap comes from the council spending more than it budgeted for last year, which in itself raises a lot of questions. The rest of the money would be used if we hit the ‘worst case’ scenario for 2024/25. 

 Whilst informing us that the government is ‘minded to approve’, us Councillors have been given very little other detail. 

Councils taking out huge borrowing from government won’t simply be given the money. It’s likely that there will be conditions attached. We may be forced to make different spending decisions to those we just voted on, perhaps have to change over leadership. But, at present, we just don’t know. 

 By taking out this ‘loan’, Havering is entering into a generational debt. Earlier conversations suggested that we may have to pay as much as £3m a year in interest, which is only going to make our budget gap grow. Similarly, we will need another loan next year and the year after. 

 The cause of this loan is clear, Government are underfunding Havering Council and this has been the case for decades. In 2001, then MP Keith Darvill (Labour) had to lobby Tony Blair’s government for more funding. So, even when Labour are running the country and splashing the cash, Havering misses out. Unfortunately, we’ve not seen our funding improved by our Conservatives government either. 

 As a Conservative, this bothers me.

 Going into the General Election, I’d have hoped that our political parties would be talking about changing things. But they are not. Instead of talking about better funding for local government, Labour are talking about £28bn for ‘green pledges’. Instead of better funding, Conservatives are talking about tax-cuts. 

 I’m all for tax-cuts. But locally, ours is just going up. 

 All the above said, we know why the ‘loan’ is needed. But, Councillors should not be kept in the dark about what we are all being signed up to. 

 When we were debating the budget, the Council Leader told us that taking the loan (instead of avoiding bankruptcy) was a way to retain democratic control over spending decisions in Havering. This is because the alternative was to have government officials come in to conduct a root and branch review of Havering’s spending. They would slash and cut, senior leaders could lose their jobs, and we’d have no say in it. 

 Instead, we’re now in a position where this borough is running head-first into a loan we can’t afford, with elected representatives kept in the dark. This is not democratic and it makes me wonder if we’d be better off having the government come in to take a look. 

 When I was elected, I promised to radical transparency. I promised to keep my residents updated on what goes on in the town-hall, I even put my payslips online. Now, I can’t even tell them what we’ve just signed up to. All I can say is that their tax is going up. 

It’s time for radical transparency at all levels of government. 

 Over the weekend, I asked senior HRA councillors for more information on this loan. What I received in reply were statements such as “most of the information is already in the public domain, as [others] have had previous experience…”

 This tells me nothing about what Havering has been asked to do. 

 If this administration is going to ask all Councillors to get on board and support them in turning things around, I’m going to need to know what it is we’re being asked to do. I won’t follow them into the dark.

 I have submitted a Freedom of Information request, asking the council to provide me with a copy of the terms and conditions of the loan. I’ve also asked that all Councillors receive a briefing, so that I can keep my residents informed. 

 It is my resident’s council tax that will pay for this loan and that pays for us Councillors. They deserve to know as much as anyone else.

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