Comment

‘The Labour Party is making unfathomable financial decisions’

Leader of the Liberal Democrat group Luke Cawley-Harrison argues that Haringey Council’s spending choices are sending it to the ‘cliff edge’

I’m afraid there is no money” – that was the note left by Labour chief secretary to the Treasury Liam Byrne when his party was voted out of office in 2010. He was of course joking – it is virtually impossible for central government to run out of money in the same way an individual or business might, and though some cuts to government spending were necessary in the years following the financial crash, government did still have some options available to it.

Little did we know how bad it could eventually get. After a decade of austerity, and especially Liz Truss’s disastrous ‘mini-budget’ which sent interest rates rocketing, it really does feel like the money is running out. Local authorities have had their budgets slashed by almost 30% in real terms since 2010. Compare that to a little under 10% for education, or small increases in spending on health.

In that time, councils have actually been handed more responsibilities, including within the huge issue of adult social care. This has left all local authorities facing tough choices – but not all councils are in the same boat. Some have managed these budget cuts well and protected services, whilst others have crumbled, in some cases being forced to issue a ‘Section 114 Notice’, essentially a bankruptcy declaration.

This is in large part the fault of the Conservative government which is refusing to properly fund councils, but that doesn’t absolve local leadership of responsibility when things go wrong. Haringey’s relatively high grant from central government has shielded us from becoming one of the first tranche of councils to go over the cliff edge, but both historical and present-day decision making by council leaders can be crucial to the difference between delivering a strong budget, and one that carries significant risk to the future of that local authority.

Haringey Council, run by the Labour Party for the past 50 years, has a long history of underinvestment in its buildings: schools, commercial properties and especially council houses. Problems were allowed to grow, becoming more and more expensive to fix, until local leadership had no choice but to act. This has led to an unprecedented borrowing spree in the last couple of years to fund desperately needed works across the borough, the cost of which is due to rise to over £2billion over the next five years! With interest payments and construction costs now spiking, Haringey is facing a shortfall of £16million in its budget this year. In just two years’ time, the shortfall is projected to escalate to a huge £44m.

That is likely to lead to some pretty brutal cuts, which will affect our most vulnerable residents, but even now the Labour Party is making unfathomable decisions, like putting money aside for pet projects such as the massively over-budget Civic Centre development. Even as they propose a 31% cut in the libraries budget (which Liberal Democrats stand firmly against – you can sign our petition against these cuts at: haringeylibdems.org/save-ourlibraries), Labour is spending the same amount insourcing Haringey’s leisure centres to try running them themselves. We are all glad to finally see the back of Fusion, who have run our centres into the ground, but Haringey could have put the contract out to tender and got in a well-respected national provider who would have been able to turn things around. The obscure dogma of insourcing is apparently more important than our libraries.

Even if we get through this budget with something resembling semi-functional local services, it is hard to see how Haringey will claw its way out of the hole in which it finds itself. Leadership cannot simply blame central government funding, as its own high-risk decisions are taking the council finances perilously close to breaking point.


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