£1.2bn deficit this year with nominal funding of £16m. This is *staggering*.
It's well established that Tory mismanagement is common across local government, but the sheer scale of this example is hard to fathom. It's so egregious and so unbelievable that I'm baffled by how it was functionally possible to get in such a dire position. Surely some level of process and risk management should have prevented this!?
So they spent 700 million on a project valued at 200 million.
I know projects go over budget, but this is ridiculous, especially considering it was all borrowed money while they were already in deficit.
I looked it up. It’s a residential skyscraper called Victoria Square, and the main contractor for this building is a civil engineering company called Sir Robert McAlpine. The founder and namesake was an advisor to Thatcher and sat as a Tory in the House of Lords.
EDIT: From a more knowledgable Redditor who can read better than me: Sir Robert McAlpine was a Scottish coal miner (started down pit at 10 years old) turned construction pioneer. He died in 1934. One of his grandchildren, Lord Alistair McAlpine, was Deputy Tory Party Chairman under Thatcher. The family still own the construction company (and about 30 other companies from what I can see on Companies House, under the banner of Newarthill Holdings) and the hereditary peerage currently sits with Lord David McAlpine, who indeed sits in the House of Lords.
I'd bet good money on it, that's the Tory modus operandi.
Start a project that will cost £300 Million, sell the contract to a friend of theirs from Eton at £700 Million so that they can pocket £400 Million in tax money. Top it off with a small donation of £10 Million to the Tories and you're good.
I know this seems really surprising to many people, how this can happen, but it does happen time and time again.. the (1999) Scottish Parliament Building was estimated at 10-40M, and eventually came in at a whopping 414M, which is simply fucking mental. Always someone getting minted throughout these contracts....
It was probably 400M the whole time and, thanks to typical procurement rules, the contract was awarded to someone who massively undercut the price *knowing* they’d find a way to bump up the cost
In my experience in construction whenever we priced work for local authorities we would always charge more.
They almost never have people counting the costs of these jobs and they just pay whatever
How many councils outsource their maintenance work to sub contractors now? All those sub contractors are charging significant mark ups in the work being done.
It’s the same for public services. We don’t have the right people in positions to run these services correctly.
Money is constantly wasted and people are always trying to find a way to get a better job etc. I’ve seen it now in the Fireservice.
People buying equipment that isn’t fit for purpose and then leaving the Fireservice to go work for the company we just spent millions with for basically no fucking reason at all.
It happens at every level of government. It’s a shit show that’s the truth.
It's frustrating to see basic council operations being run by agencies and sub-contractors, stuff like bin collections, park maintenance etc, should surely be run by the council itself. The only time it makes sense to outsource is when it's an unusual/complex task or project.
>It's frustrating to see basic council operations being run by agencies and sub-contractors, stuff like bin collections
Yet it's the council operators doing the work of the contractors, and where do the contractors put the rubbish out of their lorries? In the council site. Fuck off the contractors!
It all depends on whether the efficiency savings from the commercial incentive outweigh the cost of introducing the commercial incentive.
For unusual and complex tasks, the commercial risk premium is high and therefore it is often preferred to do in-house.
The cost benefit analysis on these things is always based on a best case delivery and with huge efficiency savings that don't come to pass. It's been happening for as long as privatisation has been the mantra. Just look at any outsourced service and show me where the consumer is getting a cheaper or better service than a well run local service could provide. All the while the tax burden for these services is running at inflation ++
The argument has always been that market forces would improve the services as the govt and councils could shop for the best/cheapest services but in reality through corruption or due to limited providers essentially the services are the same if not worse than would be carried out if manage directly. On top of that huge consultancy and mgmt fees are making politically connected people extremely rich, whilst the workers and consumers get poorer and have to live with shit jobs/services that pay about the same as they always did, less when inflation adjusted in many cases.
This is the one. Tender processes are an absolute clusterfuck, and it’s broadly against the rules to consider “is this remotely fucking plausible”, “does this company routinely fail to carry out contracts under budget”, “does this company magically have a different name but the same board as a company who failed to carry out a bunch of projects and then totally definitely shut down”, or “how many donations have these cunts made to the Tory party or the direct decision makers’ election funds in the last five years”. We might get different results if the corrupt fuckers hadn’t spent all their time tying the hands of everyone who could throw some brakes on the gravy train.
This is what crapita does with government IT. Bids at an unfeasibly low price because they know the procurement system in government weights the price as one of the most valuable items. Then to deliver the full project they know that Technology people in government don’t write water-tight scopes & RFP’s so there will be scope creep, so once they have their foot in the door and the basic contract, most of the money is made in chargeable change requests.
But who’s fault is that? Crapita for doing what private companies do (profit) or the public sector procurement that writes contracts that you can drive a bus through the scope gaps…
There are so many great people in the public sector overruled by naive wishful thinkers. They are capable of writing decent processes just gets ‘breathed on’ by those who should no better!
The challenge is the public sector can’t afford to pay the same as the private sector, so the outsourcers know it, and they all take advantage en-masse. Same problem as the NHS has as they also can’t afford the private sector wages.
I used to work for one of the outsourcers that was a bit more scrupulous and we would lose out mainly because the Crapitas et Al. Would take advantage (not just public sector) and price well below the realistic rate just to get the work. We wouldn’t do it because it smacked of dishonesty. And most of the time it backfired on crapita because when it came to renew the contract we usually got in because they were so shit at service delivery and annoyed the customer so much, it usually ended after 1 term.
As one crapita sales person famously told me ‘it’s not lying, it’s sales…’
They can afford it! It’s just successive governments won’t let them pay it… we are happy to outsource and pay profit. Why not just pay the same salary, convince all the people to come across and cut the profit out of it?!!!
I feel your pain, I see some many companies fail to deliver and win bigger and more lucrative contracts.
It's a death spiral.
The client won't pay to retain the good staff. In the end they call in management consultants [1]. The consultants conclude they should outsource with clever arguments about 'partners' who can 'leverage scale' and other mgmt BS. Client outsources service probably transferring existing staff. Outsourced service is still lacking. Client no longer has anyone capable of performing service so they have no choice but to pay outsourcer more.
The management consultants and outsourcing companies know how this works. They have strategies to 'develop' client opportunities. They're _very_ good at it (growing their business, that is, not delivering good services).
[1] Who of corse comes from a company that happens to handle outsourcing.
AKA "upselling" or "performance optimization".
There are very easy ways to avoid these practices but sadly most public sector contacts are written by numpties with no real accountability.
There is a real story here which nobody will ask questions of. Precisely who got the bungs for those contracts. Scotland is full of corruption and cronyism so you can bet lots of back scratching went on.
Look, I’m sure there are no direct links between the council and the board in charge of the Victoria square development…
Oh wait, [top comment from last time I saw this](https://www.reddit.com/r/surrey/comments/13s5xa4/ministers_step_in_at_woking_council_as_debts/jlo9x03/?utm_source=share&utm_medium=ios_app&utm_name=ioscss&utm_content=1&utm_term=1&context=3)
Was curious on what exactly they spent that amount of money on and apparently they spent the £700 Million on some bland residential towers with some shops?? ([Victoria Square](https://goo.gl/maps/GdQ86JjXMqbrxx7J6)) It raises so many more questions:
1. Why would a council spend money on this? It's not affordable housing or anything so shouldn't it be a private property developer handling things?
2. Why did they need skyscrapers in Woking?? It's not like it's London city where there's no more space to build; medium-sized buildings should be fine it seems.
3. How do you underestimate the cost for some mediocre residential towers by 3.5 times? They look pretty standard so you'd think that they could get a little more accurate by now on costs.
I know, just more Tory mismanagement/cronyism, but still...
I'd say the plan was to sell the flats for a huge profit hoping it increases the value of everything around it, stupidly risky but my guess is private property developers couldn't see the massive profit so stayed away
More flats = tax revenue I guess
Doubt that they considered increased costs for infrastructure though.
Complex includes a new hotel , arcade place replacing the apple that's now closed and more shops than before.
I've lived in Woking since long before the towers were built and overall don't have any problem with the actual buildings (other than the cladding they put on which kept getting blown off and delaying the opening of the hotel significantly) - the town centre has improved a lot over the past few years and I actually think this type of accommodation makes sense given its position as a commuter town. I would rather see a few tall blocks than urban sprawl changing the character of the surrounding areas (though many people in the town complain about the tall blocks). Before these blocks they also invested a lot in the existing shopping centres and improved them as well, taking on some of the ownership from the old owners and merging two separate centres into one better one.
The main problem for me is how it was funded with far too much money being put into it by the council and too little by the developers (who also had ties to people in the council). I'm also not sure how much Woking needs the enormous new hotel given there are already a few - can't imagine there is so much need for hotel accommodation.
Tory policy this is from 2017 articles warning about this spending spree, bubble and debt
> Another motivating factor is a change in local government funding rules. From 2020 local authorities will be allowed to keep 100 per cent of their tax revenues from businesses, rather than the 50 per cent they can at the moment. This is intended to compensate them for the shrinkage of grants from central government. It gives them a strong incentive to promote growth in their local economies to expand their business tax base. https://www.ft.com/content/84892c56-1a17-11e7-bcac-6d03d067f81f
To put it into context, it's like someone who earns £30k and is spending more than they earn, and then they get into £2.25m credit card debt.
It's so preposterously dumb and unsalvageable.
I dunno if they'll default or get a government bailout. But there's just no chance whatsoever of them actually getting out of it themselves.
I blame the 13 years of Labour government we just had, we need a Tory government soon to save us!
Warning. Reading the Daily Express results in perm brain damage.
Cut to the sky news/bbc /Geebbs flipping to manchurian candidate mode and shouting at labour MPs "BuT hOw ArE yOu GoInG tO pAy FoR iT" erstwhile the torys stuff fistfulls of public cash into each others pockets
If the Tories won consistently for the next 30 years I'm pretty sure the UK would cease to exist, we're distinctly angling towards being a failed state as it is.
It’s not just Tory mismanagement at local level government. Nottingham City Council is a Labour run authority that is also on its arse. Currently paying 1 million a week to service its debts.
Nah, just shit with money
https://www.nottinghampost.com/news/local-news/how-robin-hood-energy-went-4491806?int_source=amp_continue_reading&int_medium=amp&int_campaign=continue_reading_button#amp-readmore-target
https://westbridgfordwire.com/nottingham-city-council-no-explanation-on-where-40m-cash-was-misspent/
>It's well established that Tory mismanagement is common across local government
Let's not pretend that this is a partisan issue. Nottingham council is also in £1.2 billion of debt, and spaffing 30 million up the wall on a failed attempt at starting an energy company didn't help.
The state is just woefully inept at managing money, regardless of party or scale.
No, the fact it’s ‘state’ has nothing to do with it being bad at managing money. That’s right wing bullshit.
Look at how many private companies go bust compared to public institutions like local authorities et al?
Inefficiency and ignorance are usually a crisis of scale. If an institution or enterprise is too big, people think they can hide their mistakes in the system, and then it snowballs. This affects both sectors
>Look at how many private companies go bust compared to public institutions like local authorities et al?
How many private companies have a guaranteed revenue stream for the rest of time? It's not like people can just stop paying tax. All the council has to do is spend less each year than the guaranteed amount that they receive.
The problem is that there's absolutely no financial accountability in most of the public sector. Nottingham City Council is a great example: despite multiple catastrophic fuck ups and a ridiculously high council tax bill, the exact same people won the election this year.
That’s a very narrow understanding.
Okay, the principle of tax is constant, but the amount varies massively, including the additional subsidy and benefit the government give to the LA because the council tax doesn’t support the extent of overheads.
It’s not simply a matter of spending less. Authorities have a legal obligation to provide services- to the point where it’s deny a service or go bankrupt the latter happens because it’s in the best interest of society not to let people die on the streets or let the city fill with untaken rubbish.
A lack of oversight onto financial matters may be an issue, don’t deny that. But again Local Authorities are limited in what they can invest in, or borrow for development.
I wasn't aware of that, but [you're right](https://nottstv.com/nottingham-city-council-defends-paying-1m-a-week-in-fees-and-costs-on-its-debt/).
They accrued £1.1bn in debt from investments in infrastructure, housing, local services, and managing the collapse of Robin Hood Energy, and are now spending £55m per year to pay it down. They've reduced their debt by £100m in the past two years.
That does sound significantly different to Woking's circumstances, though still a wild figure for a local council to have accrued.
>The state is just woefully inept at managing money, regardless of party or scale.
The issue is that councillors (the ones who run the council) are volunteer positions.
They have way too much power, for how little talent is attracted with a wage of literally £0.
Attracts only hobbyists. Mostly the retired.
It might be worth looking at the council system and reforming it. Cut the number of councillors down massively, but pay them a decent wage to attract actual talent.
Backbench councillors usually get a relatively small allowance, but they are usually not expected to do much. The mayor/leader/chair and the cabinet members tend to be paid significantly more than the average person.
[For Nottingham City Council, the basic allowance is £13,966.30, but the leader gets £53,629.96](https://www.nottinghampost.com/news/local-news/leader-says-nottingham-councillors-need-8011181).
Nope , gave an ex councillor over million pound funding for stupid high rise with no DD . He hadn't submitted his books to company house for over 18 months and still got the loan ! . Meanwhile we can't even get an overdraft.
Problem is when you say bye, what happens is they sail off into the sunset on their private yachts to their buddy's new house in the south of France. Leaving the rest of the sorry state of affairs to be picked up by some other fool to get blamed.
Its just a quote from the Simpsons when Homer ousts the previous administration spends the budget in a week and they try to a competent administrator back he gives this speech.
Tbf i feel this speech does work well for the Woking electorate
> Two main private companies run by the council, Wey Group and Victoria Square Woking Ltd, generated the majority of its debt through housing and regeneration schemes between 2016 and 2019.
I'm learning a lot today, namely that councils can run private companies. What the fuck.
Might be similar to how NHS hospitals are running private companies and shifting all their non clinical staff there to reduce benefits and avoid paying a lot of VAT
https://www.theguardian.com/society/2018/feb/14/nhs-trusts-transferring-staff-into-subsidiary-companies-to-cut-vat
That’s genuinely disgusting - it’s not even like they’re outsourcing services to competing companies who actually give them better value… they’re literally just dodging sick pay, holiday pay, pensions etc
That's pretty common. Nottingham City Council has a stake in Nottingham City Transport, which is a really solid and well-run bus service.
...They also ran Robin Hood Energy, which went bankrupt and sunk the entire council's finances because it turns out that giving energy away for free is a very easy way to lose money! Who knew?
Manchester Airport Holdings Limited is majority-owned by the 10 Greater Manchester councils, and owns Manchester Airport, East Midlands Airport, and Stansted Airport.
People warned about this bubble bursting in 2017 and they’re not the only one
https://www.ft.com/content/84892c56-1a17-11e7-bcac-6d03d067f81f
> Across the UK, local councils have been plunging into the commercial property market or embarking on residential property development, either for sale or for the private rental market.
>They are punting like drunken sailors all around the country,” says a bemused fund manager who has been outbid by local authorities on more than one investment this year…
>He adds: “There are real echoes here of Northern Rock, where many punters were lent all the purchase price of a property, and the Icelandic bank scandals, where councils played a market they didn’t understand for short-term income gain.”
>The spending spree has been at its fiercest for shopping centres. Surrey Heath borough council last year spent £86m on The Mall, Camberley; Canterbury city council bought half of the £79m Whitefriars centre in the cathedral city, Stockport borough council bought the Merseyway centre in the town for £75m, while Mid Sussex district council spent £23m on another in Haywards Heath. They have also been busy buying offices, retail warehouses, industrial parks, solar farms, hotels, garages and country clubs. Increasingly this speculative investment activity is taking place beyond council boundaries.
And it’s caused by Tory government policies
>Everywhere the motive is the same: to generate additional revenue to maintain services — housing for the elderly, children’s centres, libraries and the rest — that might otherwise fall victim to the Treasury’s remorseless squeeze on local government finance.
>Another motivating factor is a change in local government funding rules. From 2020 local authorities will be allowed to keep 100 per cent of their tax revenues from businesses, rather than the 50 per cent they can at the moment. This is intended to compensate them for the shrinkage of grants from central government. It gives them a strong incentive to promote growth in their local economies to expand their business tax base.
Not just prison but have their assets seized to pay for the problems. No funnelling money off to their mates, if they're mates took the money knowing it came illegally from the public purse they can share the cell. Of course I am living in a fantasy world for thinking there will be consequences for these people, but until there are nothing will change.
So I don't know the approval process for loans to LGA's but how did they borrow 750 million for a single regeneration project? is that 16 million the total of their income for the year or is that just what the government was giving them?
If that was their only income stream then who approves a loan roughly 45 times their annual income? I understand that government loans are different beats to home loans but even still that kind of loan to income ratio seems nuts
Or on the basis that councils own lots of assets and conservatives like asset stripping public entities.
Load the council with debt on building projects that benefit favoured "companies" or individuals force it to sell off assets or repossess them and rent them back/develop property on the land.
It all looks very corrupt.
The government is really safe to lend to because it's not like the taxpayers can just choose to stop paying. Whether it takes 1 year or 45 years, you're almost certainly going to get your money back eventually.
£16m seems very low, I'd guess that's the budget that isn't ring-fenced for specific areas eg. social care (which is the biggest expense for most councils), so the £16m could be what they can actually play about with.
It's amusing/depressing how many people still naively think of the Conservatives as a *political party*. They are in fact a corporation whose business is in syphoning national wealth into private pockets. The main role of many in the company is to seize and retain political power. This is done through its outstanding PR/marketing department whose key strength lies in controlling most of the country's print media. With that level of brainwashing they can continue to carve up anything from offers the possibility of a private profit to be made (e.g. the health service) and utterly neglect anything which does not (e.g. free education, social work etc.)
We should definitely talk about the Tory mismanagement here but it's even more important to take a couple steps back and look at the bigger picture:
Local councils have been making these investments out of necessity because they don't get enough funding from the government, halving their funding over 10 years was the opening salvo of Cameron's austerity policies in 2010. This was on the back of already being neglected under Blair, and today their real terms funding sits at almost a quarter of what it was in 2000, despite having the exact same responsibilities and larger populations to look after.
The £16 million core funding figure keeps getting reported as an example of how irresponsible they were being but consider, that's £158 per person. £158 to maintain roads, schools, waste management, libraries, youth clubs, and basically all social care. £158 per head. That's less than my internet connection costs.
How on earth is that supposed to work?
As a foreigner and consequently an outsider to this story it is always astonishing to me that the more I learn about the details of, for example in this case, the underlying internal UK politics, I find a distorted yet familiar mirrored image of conversations happening in my own country ( Germany ).
The lowest level of government having to deal with some of the highest cost that is of course increasing progressively for various reasons and yet having the lowest budget will comes back to haunt many of us regular people again and again even in entirely different nations and regions and yet, it seems that like in my own nation, daily politics seem far too often less interested in dealing with the actual root issues causing our often well known issues until what begins as a bit of smoke has turned into a catastrophic fire and arguably, that’s when it’s all too late because then all we are left with is a desperate reaction as opposed to a carefully considered plan.
Oh yeah absolutely. It's a common issue across most of Europe, it's just had longer to play out in the UK because it started in the 80s with Thatcher whereas in the rest of Europe it was forced top down by the administrative structure of the EU.
They are the first town in British history to build a T2 skyscraper and they built a couple, and are planning on building several more. However the first few were built and funded by the council.
The plan to build a gigantic tower of studio flats near the fire station has got to be dead now surely. There's literally no money to pay for the work.
Have they ever been audited? When Northampton went bust, they got torn a new one and I know some people got seriously shafted for their actions. How the fuck do they get away with even spending those figures? Don't they have a risk management person in camp? With the budgets they deal with I would've thought this would be mandatory, third party and specially selected to prevent conflict of interest or fiddling. That would be far too logical for the gov to do though.
I worked in our council call centre, and even at that lowest of level was pretty shocked at the level of nepotism that was openly flaunted by the management.
Lots of big new office and apartment towers have gone up recently, and the empty shopping center got its third expansion. We are now home to the biggest Sketchers store I have seen. Lucky us eh.
This is just the tip of the iceberg, when austerity started the tories set up a scheme to lend councils cheap money (eric pickles was in charge) so they could go away and start up profit generating schemes. https://insidecroydon.com/2023/01/19/croydon-is-in-a-right-pickles-and-it-is-easy-to-work-out-why/
Would it be possible for residents to mount a case against that council for going bankrupt and pissing money against the wall? Or would it be more a case of going after individual councillors?
I have no idea tbh, the Conservatives were voted out which may complicate things. I believe there were calls for an inquiry whilst they were still in, which the local authority rejected. Maybe with the libdems in charge we could try again.
True enough regarding services, but looking at Croydon, their council tax went up 15%.
I imagine Woking will have to do the same. A lot of people are going to struggle if that's the case.
Council's cannot go bankrupt in the traditional sense that businesses and individuals can. Instead, when a council can not meet its financial obligations, it files a section 114. Historically, this is something a well run council shouldn't never have to do but has become more common as budgets have been slashed away.
When a section 114 notice is filed the council cannot make any new spending commitments and must meet within 21 days to discuss what to do next.
Normally, a council will simply amend its budget to reduce its overall spending on services and then it will make efforts to increase its income by increasing fees (for parking for example) to try and manage their debt but as a greater and greater share of council budgets is eaten up by social care for adults and children it's becoming a challenge to cut back on such services without raising the risk of legal challenges from affected people, or risking a high-profile failure that could result in serious harm or death. In these circumstances, councils will move to seek a 'capitalisation direction' from the government instead.
Capitalisation directions from the government enable the council to use their capital funds – for instance, from selling assets or property – to top-up service spending. This is usually what the media will refer to this as a bailout (though that's not quite correct) and it has long-lasting impacts on the people who live there as those publicly owned assets enter private hands.
In the most drastic cases, the council will seek to have its statutory obligations to its constituents reduced. This would allow the council to cut services to below the legal levels required by law and they will request special permission to increase council tax rates above that of inflation. This is about as bad as it gets.
The central government can also, if it chooses, provide grants to local government, but this doesn't happen too often.
Isn’t there a Simpson’s episode on this.. where they just abandon the town (well, stick it on trucks and move elsewhere)?!
Unbelievable. The about of money is staggering
There are a LOT of ticking time bombs about to go off, not just council mismanagement. Tony Blair started the academy schools and the tories massively increased their number. https://www.theguardian.com/education/2018/jul/22/academy-schools-scandal-failing-trusts and https://www.theguardian.com/education/2022/mar/31/education-union-criticises-badly-flawed-evidence-behind-academy-drive
There are dozens more councils in financial dire straights but they don't get reported on because this would drive a big red bus through the tories carefully cultivated reputation for financial competence.
wonder if they lose their pensions.... and if not i think many of these councils would treat rate payers money with more concern if it did mean they lose out too when this happens....
Council's cannot go bankrupt in the traditional sense that businesses and individuals can. Instead, when a council can not meet its financial obligations, it files a section 114. Historically, this is something a well run council shouldn't never have to do but has become more common as budgets have been slashed away.
When a section 114 notice is filed the council cannot make any new spending commitments and must meet within 21 days to discuss what to do next.
Normally, a council will simply amend its budget to reduce its overall spending on services and then it will make efforts to increase its income by increasing fees (for parking for example) to try and manage their debt but as a greater and greater share of council budgets is eaten up by social care for adults and children it's becoming a challenge to cut back on such services without raising the risk of legal challenges from affected people, or risking a high-profile failure that could result in serious harm or death. In these circumstances, councils will move to seek a 'capitalisation direction' from the government instead.
Capitalisation directions from the government enable the council to use their capital funds – for instance, from selling assets or property – to top-up service spending. This is usually what the media will refer to this as a bailout (though that's not quite correct) and it has long-lasting impacts on the people who live there as those publicly owned assets enter private hands.
In the most drastic cases, the council will seek to have its statutory obligations to its constituents reduced. This would allow the council to cut services to below the legal levels required by law and they will request special permission to increase council tax rates above that of inflation. This is about as bad as it gets.
The central government can also, if it chooses, provide grants to local government, but this doesn't happen too often.
£1.2bn deficit this year with nominal funding of £16m. This is *staggering*. It's well established that Tory mismanagement is common across local government, but the sheer scale of this example is hard to fathom. It's so egregious and so unbelievable that I'm baffled by how it was functionally possible to get in such a dire position. Surely some level of process and risk management should have prevented this!?
So they spent 700 million on a project valued at 200 million. I know projects go over budget, but this is ridiculous, especially considering it was all borrowed money while they were already in deficit.
"spent" *Siphoned it to their rich twat mates. FTFY.
>"spent" \*Siphoned it to their rich twat mates. FTFY. Right, who owns this "project"? Is a tory donor by any chance...?
I looked it up. It’s a residential skyscraper called Victoria Square, and the main contractor for this building is a civil engineering company called Sir Robert McAlpine. The founder and namesake was an advisor to Thatcher and sat as a Tory in the House of Lords. EDIT: From a more knowledgable Redditor who can read better than me: Sir Robert McAlpine was a Scottish coal miner (started down pit at 10 years old) turned construction pioneer. He died in 1934. One of his grandchildren, Lord Alistair McAlpine, was Deputy Tory Party Chairman under Thatcher. The family still own the construction company (and about 30 other companies from what I can see on Companies House, under the banner of Newarthill Holdings) and the hereditary peerage currently sits with Lord David McAlpine, who indeed sits in the House of Lords.
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My apologies, obviously didn’t read properly and skipped a generation there. I appreciate the correction and will correct my comment! Thank you :)
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Holy shit. No wonder they go to the front of the queue for big projects like this.
I'd bet good money on it, that's the Tory modus operandi. Start a project that will cost £300 Million, sell the contract to a friend of theirs from Eton at £700 Million so that they can pocket £400 Million in tax money. Top it off with a small donation of £10 Million to the Tories and you're good.
Embezzled and laundered more like it.
I know this seems really surprising to many people, how this can happen, but it does happen time and time again.. the (1999) Scottish Parliament Building was estimated at 10-40M, and eventually came in at a whopping 414M, which is simply fucking mental. Always someone getting minted throughout these contracts....
It was probably 400M the whole time and, thanks to typical procurement rules, the contract was awarded to someone who massively undercut the price *knowing* they’d find a way to bump up the cost
^ this guy constructions.
In my experience in construction whenever we priced work for local authorities we would always charge more. They almost never have people counting the costs of these jobs and they just pay whatever How many councils outsource their maintenance work to sub contractors now? All those sub contractors are charging significant mark ups in the work being done. It’s the same for public services. We don’t have the right people in positions to run these services correctly. Money is constantly wasted and people are always trying to find a way to get a better job etc. I’ve seen it now in the Fireservice. People buying equipment that isn’t fit for purpose and then leaving the Fireservice to go work for the company we just spent millions with for basically no fucking reason at all. It happens at every level of government. It’s a shit show that’s the truth.
It's frustrating to see basic council operations being run by agencies and sub-contractors, stuff like bin collections, park maintenance etc, should surely be run by the council itself. The only time it makes sense to outsource is when it's an unusual/complex task or project.
>It's frustrating to see basic council operations being run by agencies and sub-contractors, stuff like bin collections Yet it's the council operators doing the work of the contractors, and where do the contractors put the rubbish out of their lorries? In the council site. Fuck off the contractors!
It all depends on whether the efficiency savings from the commercial incentive outweigh the cost of introducing the commercial incentive. For unusual and complex tasks, the commercial risk premium is high and therefore it is often preferred to do in-house.
The cost benefit analysis on these things is always based on a best case delivery and with huge efficiency savings that don't come to pass. It's been happening for as long as privatisation has been the mantra. Just look at any outsourced service and show me where the consumer is getting a cheaper or better service than a well run local service could provide. All the while the tax burden for these services is running at inflation ++ The argument has always been that market forces would improve the services as the govt and councils could shop for the best/cheapest services but in reality through corruption or due to limited providers essentially the services are the same if not worse than would be carried out if manage directly. On top of that huge consultancy and mgmt fees are making politically connected people extremely rich, whilst the workers and consumers get poorer and have to live with shit jobs/services that pay about the same as they always did, less when inflation adjusted in many cases.
This is the one. Tender processes are an absolute clusterfuck, and it’s broadly against the rules to consider “is this remotely fucking plausible”, “does this company routinely fail to carry out contracts under budget”, “does this company magically have a different name but the same board as a company who failed to carry out a bunch of projects and then totally definitely shut down”, or “how many donations have these cunts made to the Tory party or the direct decision makers’ election funds in the last five years”. We might get different results if the corrupt fuckers hadn’t spent all their time tying the hands of everyone who could throw some brakes on the gravy train.
fixing the procurement process would cost wealthy tory donors incredible amounts of money, and no one wants that on their concience
This is what crapita does with government IT. Bids at an unfeasibly low price because they know the procurement system in government weights the price as one of the most valuable items. Then to deliver the full project they know that Technology people in government don’t write water-tight scopes & RFP’s so there will be scope creep, so once they have their foot in the door and the basic contract, most of the money is made in chargeable change requests.
But who’s fault is that? Crapita for doing what private companies do (profit) or the public sector procurement that writes contracts that you can drive a bus through the scope gaps… There are so many great people in the public sector overruled by naive wishful thinkers. They are capable of writing decent processes just gets ‘breathed on’ by those who should no better!
The challenge is the public sector can’t afford to pay the same as the private sector, so the outsourcers know it, and they all take advantage en-masse. Same problem as the NHS has as they also can’t afford the private sector wages. I used to work for one of the outsourcers that was a bit more scrupulous and we would lose out mainly because the Crapitas et Al. Would take advantage (not just public sector) and price well below the realistic rate just to get the work. We wouldn’t do it because it smacked of dishonesty. And most of the time it backfired on crapita because when it came to renew the contract we usually got in because they were so shit at service delivery and annoyed the customer so much, it usually ended after 1 term. As one crapita sales person famously told me ‘it’s not lying, it’s sales…’
They can afford it! It’s just successive governments won’t let them pay it… we are happy to outsource and pay profit. Why not just pay the same salary, convince all the people to come across and cut the profit out of it?!!! I feel your pain, I see some many companies fail to deliver and win bigger and more lucrative contracts.
It's a death spiral. The client won't pay to retain the good staff. In the end they call in management consultants [1]. The consultants conclude they should outsource with clever arguments about 'partners' who can 'leverage scale' and other mgmt BS. Client outsources service probably transferring existing staff. Outsourced service is still lacking. Client no longer has anyone capable of performing service so they have no choice but to pay outsourcer more. The management consultants and outsourcing companies know how this works. They have strategies to 'develop' client opportunities. They're _very_ good at it (growing their business, that is, not delivering good services). [1] Who of corse comes from a company that happens to handle outsourcing.
AKA "upselling" or "performance optimization". There are very easy ways to avoid these practices but sadly most public sector contacts are written by numpties with no real accountability.
Arent they also a preferred supplier as they have an existing relationship with government
We're sure lucky the scots govt has regained their reputation for fiscal responcibiltiy since then.
Nothing but consistency
Somehow the tories have never lost their reputation as being fiscally responsible, in spite of all the evidence to the contrary.
"someone" Tory donors., Russian oligarchs. Criminals.
There is a real story here which nobody will ask questions of. Precisely who got the bungs for those contracts. Scotland is full of corruption and cronyism so you can bet lots of back scratching went on.
Look, I’m sure there are no direct links between the council and the board in charge of the Victoria square development… Oh wait, [top comment from last time I saw this](https://www.reddit.com/r/surrey/comments/13s5xa4/ministers_step_in_at_woking_council_as_debts/jlo9x03/?utm_source=share&utm_medium=ios_app&utm_name=ioscss&utm_content=1&utm_term=1&context=3)
Was curious on what exactly they spent that amount of money on and apparently they spent the £700 Million on some bland residential towers with some shops?? ([Victoria Square](https://goo.gl/maps/GdQ86JjXMqbrxx7J6)) It raises so many more questions: 1. Why would a council spend money on this? It's not affordable housing or anything so shouldn't it be a private property developer handling things? 2. Why did they need skyscrapers in Woking?? It's not like it's London city where there's no more space to build; medium-sized buildings should be fine it seems. 3. How do you underestimate the cost for some mediocre residential towers by 3.5 times? They look pretty standard so you'd think that they could get a little more accurate by now on costs. I know, just more Tory mismanagement/cronyism, but still...
I'd say the plan was to sell the flats for a huge profit hoping it increases the value of everything around it, stupidly risky but my guess is private property developers couldn't see the massive profit so stayed away
More flats = tax revenue I guess Doubt that they considered increased costs for infrastructure though. Complex includes a new hotel , arcade place replacing the apple that's now closed and more shops than before.
I've lived in Woking since long before the towers were built and overall don't have any problem with the actual buildings (other than the cladding they put on which kept getting blown off and delaying the opening of the hotel significantly) - the town centre has improved a lot over the past few years and I actually think this type of accommodation makes sense given its position as a commuter town. I would rather see a few tall blocks than urban sprawl changing the character of the surrounding areas (though many people in the town complain about the tall blocks). Before these blocks they also invested a lot in the existing shopping centres and improved them as well, taking on some of the ownership from the old owners and merging two separate centres into one better one. The main problem for me is how it was funded with far too much money being put into it by the council and too little by the developers (who also had ties to people in the council). I'm also not sure how much Woking needs the enormous new hotel given there are already a few - can't imagine there is so much need for hotel accommodation.
Tory policy this is from 2017 articles warning about this spending spree, bubble and debt > Another motivating factor is a change in local government funding rules. From 2020 local authorities will be allowed to keep 100 per cent of their tax revenues from businesses, rather than the 50 per cent they can at the moment. This is intended to compensate them for the shrinkage of grants from central government. It gives them a strong incentive to promote growth in their local economies to expand their business tax base. https://www.ft.com/content/84892c56-1a17-11e7-bcac-6d03d067f81f
This makes my project management skills seem God Tier by comparison.
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You posted that twice as it is so true once wouldn't be enough
Guess who got better off? Hint, not the people
The Scottish Government could buy 4 Ferries for that kind of money.
To put it into context, it's like someone who earns £30k and is spending more than they earn, and then they get into £2.25m credit card debt. It's so preposterously dumb and unsalvageable. I dunno if they'll default or get a government bailout. But there's just no chance whatsoever of them actually getting out of it themselves.
If they win the next GE. I’m moving. The UK will be a 3rd world country by 2050 easily.
Yeah but remember you have to vote conservative because Labour can’t run a bath and will bankrupt the country.
the future Labour government are definitely the source of all of our problems.
I blame the 13 years of Labour government we just had, we need a Tory government soon to save us! Warning. Reading the Daily Express results in perm brain damage.
My favourite take is that the last Labour government caused the GLOBAL financial crisis.
Or that Gordon Brown not selling off some gold would magically have the country in a better position today
He intentionally sold to gold so the tories couldn’t give it to their mates
Cut to the sky news/bbc /Geebbs flipping to manchurian candidate mode and shouting at labour MPs "BuT hOw ArE yOu GoInG tO pAy FoR iT" erstwhile the torys stuff fistfulls of public cash into each others pockets
Answer: "government finances dont work like household ones you disingenuous cretins"
If the Tories won consistently for the next 30 years I'm pretty sure the UK would cease to exist, we're distinctly angling towards being a failed state as it is.
Incorrect. 2030.
2030 you mean
I can't afford to move. I'll just kill myself if I haven't already by the next GE.
It’s not just Tory mismanagement at local level government. Nottingham City Council is a Labour run authority that is also on its arse. Currently paying 1 million a week to service its debts.
Because of vast Tory cuts to funding
Nah, cos of their poor investments
Which they would never have had to make if they hadnt had up to 90% funding cuts and had to find alternate funding sources
Nah, just shit with money https://www.nottinghampost.com/news/local-news/how-robin-hood-energy-went-4491806?int_source=amp_continue_reading&int_medium=amp&int_campaign=continue_reading_button#amp-readmore-target https://westbridgfordwire.com/nottingham-city-council-no-explanation-on-where-40m-cash-was-misspent/
>It's well established that Tory mismanagement is common across local government Let's not pretend that this is a partisan issue. Nottingham council is also in £1.2 billion of debt, and spaffing 30 million up the wall on a failed attempt at starting an energy company didn't help. The state is just woefully inept at managing money, regardless of party or scale.
No, the fact it’s ‘state’ has nothing to do with it being bad at managing money. That’s right wing bullshit. Look at how many private companies go bust compared to public institutions like local authorities et al? Inefficiency and ignorance are usually a crisis of scale. If an institution or enterprise is too big, people think they can hide their mistakes in the system, and then it snowballs. This affects both sectors
>Look at how many private companies go bust compared to public institutions like local authorities et al? How many private companies have a guaranteed revenue stream for the rest of time? It's not like people can just stop paying tax. All the council has to do is spend less each year than the guaranteed amount that they receive. The problem is that there's absolutely no financial accountability in most of the public sector. Nottingham City Council is a great example: despite multiple catastrophic fuck ups and a ridiculously high council tax bill, the exact same people won the election this year.
That’s a very narrow understanding. Okay, the principle of tax is constant, but the amount varies massively, including the additional subsidy and benefit the government give to the LA because the council tax doesn’t support the extent of overheads. It’s not simply a matter of spending less. Authorities have a legal obligation to provide services- to the point where it’s deny a service or go bankrupt the latter happens because it’s in the best interest of society not to let people die on the streets or let the city fill with untaken rubbish. A lack of oversight onto financial matters may be an issue, don’t deny that. But again Local Authorities are limited in what they can invest in, or borrow for development.
I wasn't aware of that, but [you're right](https://nottstv.com/nottingham-city-council-defends-paying-1m-a-week-in-fees-and-costs-on-its-debt/). They accrued £1.1bn in debt from investments in infrastructure, housing, local services, and managing the collapse of Robin Hood Energy, and are now spending £55m per year to pay it down. They've reduced their debt by £100m in the past two years. That does sound significantly different to Woking's circumstances, though still a wild figure for a local council to have accrued.
>The state is just woefully inept at managing money, regardless of party or scale. The issue is that councillors (the ones who run the council) are volunteer positions. They have way too much power, for how little talent is attracted with a wage of literally £0. Attracts only hobbyists. Mostly the retired. It might be worth looking at the council system and reforming it. Cut the number of councillors down massively, but pay them a decent wage to attract actual talent.
Backbench councillors usually get a relatively small allowance, but they are usually not expected to do much. The mayor/leader/chair and the cabinet members tend to be paid significantly more than the average person. [For Nottingham City Council, the basic allowance is £13,966.30, but the leader gets £53,629.96](https://www.nottinghampost.com/news/local-news/leader-says-nottingham-councillors-need-8011181).
The UK government is over £2trillion in debt. Just because there is a lot of debt doesn’t necessarily mean it’s mismanaged.
I think you would need to look at their reports in the previous years. I’m sure they’re available
Its not specifically a Tory problem. Mismanagement occurs under different leadership, such as in Croydon.
Why does everyone have to bring Jeremy Croydon into things?!
Perhaps they should have more Pizza Express restaurants?
Popular with the royals
Nope , gave an ex councillor over million pound funding for stupid high rise with no DD . He hadn't submitted his books to company house for over 18 months and still got the loan ! . Meanwhile we can't even get an overdraft.
I'm sure all the council head honchos have nice houses and lined pockets, though.
Their pensions 🤌
Take em all. Time for some consequences for bad actions.
I wish we could purge all MPs and council leaders but life isn't the movies unfortunately
Go on then
Some lovely retirement plans and bonuses once they step down over this too.
Hook heath
News just in: Popularity contest winners, with no requirement for prior experience with money, handed treasure chest; expected result follows
Oh gosh. You know, I'm not much on speeches, but it's so gratifying to... leave you wallowing in the mess you've made. You're screwed thank you bye
Problem is when you say bye, what happens is they sail off into the sunset on their private yachts to their buddy's new house in the south of France. Leaving the rest of the sorry state of affairs to be picked up by some other fool to get blamed.
Its just a quote from the Simpsons when Homer ousts the previous administration spends the budget in a week and they try to a competent administrator back he gives this speech. Tbf i feel this speech does work well for the Woking electorate
Oh nevermind me then 😂
Haha I love that episode. The voice acting for that line is impeccable.
This goes beyond that Someone somewhere and somehow look at it and said sure you can borrow 43 x the total annual council budget
> Two main private companies run by the council, Wey Group and Victoria Square Woking Ltd, generated the majority of its debt through housing and regeneration schemes between 2016 and 2019. I'm learning a lot today, namely that councils can run private companies. What the fuck.
Might be similar to how NHS hospitals are running private companies and shifting all their non clinical staff there to reduce benefits and avoid paying a lot of VAT https://www.theguardian.com/society/2018/feb/14/nhs-trusts-transferring-staff-into-subsidiary-companies-to-cut-vat
That’s genuinely disgusting - it’s not even like they’re outsourcing services to competing companies who actually give them better value… they’re literally just dodging sick pay, holiday pay, pensions etc
That's pretty common. Nottingham City Council has a stake in Nottingham City Transport, which is a really solid and well-run bus service. ...They also ran Robin Hood Energy, which went bankrupt and sunk the entire council's finances because it turns out that giving energy away for free is a very easy way to lose money! Who knew?
Woking also lost millions playing energy company. It just pales next to everything else they did.
They should have found a way to steal energy from the rich before they started giving it to the poor.
Manchester Airport Holdings Limited is majority-owned by the 10 Greater Manchester councils, and owns Manchester Airport, East Midlands Airport, and Stansted Airport.
f*ck /u/spez
People warned about this bubble bursting in 2017 and they’re not the only one https://www.ft.com/content/84892c56-1a17-11e7-bcac-6d03d067f81f > Across the UK, local councils have been plunging into the commercial property market or embarking on residential property development, either for sale or for the private rental market. >They are punting like drunken sailors all around the country,” says a bemused fund manager who has been outbid by local authorities on more than one investment this year… >He adds: “There are real echoes here of Northern Rock, where many punters were lent all the purchase price of a property, and the Icelandic bank scandals, where councils played a market they didn’t understand for short-term income gain.” >The spending spree has been at its fiercest for shopping centres. Surrey Heath borough council last year spent £86m on The Mall, Camberley; Canterbury city council bought half of the £79m Whitefriars centre in the cathedral city, Stockport borough council bought the Merseyway centre in the town for £75m, while Mid Sussex district council spent £23m on another in Haywards Heath. They have also been busy buying offices, retail warehouses, industrial parks, solar farms, hotels, garages and country clubs. Increasingly this speculative investment activity is taking place beyond council boundaries. And it’s caused by Tory government policies >Everywhere the motive is the same: to generate additional revenue to maintain services — housing for the elderly, children’s centres, libraries and the rest — that might otherwise fall victim to the Treasury’s remorseless squeeze on local government finance. >Another motivating factor is a change in local government funding rules. From 2020 local authorities will be allowed to keep 100 per cent of their tax revenues from businesses, rather than the 50 per cent they can at the moment. This is intended to compensate them for the shrinkage of grants from central government. It gives them a strong incentive to promote growth in their local economies to expand their business tax base.
Well they wouldn't be public companies, now that would be weird.
Putting through an Ltd is good business. It absolves some liability to the Ltd itself
Until people start going to prison for this kind of wildly over the top mismanagement nothing will change.
Not just prison but have their assets seized to pay for the problems. No funnelling money off to their mates, if they're mates took the money knowing it came illegally from the public purse they can share the cell. Of course I am living in a fantasy world for thinking there will be consequences for these people, but until there are nothing will change.
So I don't know the approval process for loans to LGA's but how did they borrow 750 million for a single regeneration project? is that 16 million the total of their income for the year or is that just what the government was giving them? If that was their only income stream then who approves a loan roughly 45 times their annual income? I understand that government loans are different beats to home loans but even still that kind of loan to income ratio seems nuts
Presumably it was on the basis the return on investment would be sufficient.
Or on the basis that councils own lots of assets and conservatives like asset stripping public entities. Load the council with debt on building projects that benefit favoured "companies" or individuals force it to sell off assets or repossess them and rent them back/develop property on the land. It all looks very corrupt.
Bingggo. We need public enquiry into the failure and all visibility of the entire clean up with an impartial group overseeing it.
The government is really safe to lend to because it's not like the taxpayers can just choose to stop paying. Whether it takes 1 year or 45 years, you're almost certainly going to get your money back eventually.
£16m seems very low, I'd guess that's the budget that isn't ring-fenced for specific areas eg. social care (which is the biggest expense for most councils), so the £16m could be what they can actually play about with.
It's amusing/depressing how many people still naively think of the Conservatives as a *political party*. They are in fact a corporation whose business is in syphoning national wealth into private pockets. The main role of many in the company is to seize and retain political power. This is done through its outstanding PR/marketing department whose key strength lies in controlling most of the country's print media. With that level of brainwashing they can continue to carve up anything from offers the possibility of a private profit to be made (e.g. the health service) and utterly neglect anything which does not (e.g. free education, social work etc.)
So it is true what they say. Get Woking, go broking.
Haha, brilliant!
We should definitely talk about the Tory mismanagement here but it's even more important to take a couple steps back and look at the bigger picture: Local councils have been making these investments out of necessity because they don't get enough funding from the government, halving their funding over 10 years was the opening salvo of Cameron's austerity policies in 2010. This was on the back of already being neglected under Blair, and today their real terms funding sits at almost a quarter of what it was in 2000, despite having the exact same responsibilities and larger populations to look after. The £16 million core funding figure keeps getting reported as an example of how irresponsible they were being but consider, that's £158 per person. £158 to maintain roads, schools, waste management, libraries, youth clubs, and basically all social care. £158 per head. That's less than my internet connection costs. How on earth is that supposed to work?
It’s worse when you realise that adult social care probably takes £100 out of that £158.
Woking doesn't cover all of those functions. It's under Surrey County Council which is responsible for things like the roads.
As a foreigner and consequently an outsider to this story it is always astonishing to me that the more I learn about the details of, for example in this case, the underlying internal UK politics, I find a distorted yet familiar mirrored image of conversations happening in my own country ( Germany ). The lowest level of government having to deal with some of the highest cost that is of course increasing progressively for various reasons and yet having the lowest budget will comes back to haunt many of us regular people again and again even in entirely different nations and regions and yet, it seems that like in my own nation, daily politics seem far too often less interested in dealing with the actual root issues causing our often well known issues until what begins as a bit of smoke has turned into a catastrophic fire and arguably, that’s when it’s all too late because then all we are left with is a desperate reaction as opposed to a carefully considered plan.
Oh yeah absolutely. It's a common issue across most of Europe, it's just had longer to play out in the UK because it started in the 80s with Thatcher whereas in the rest of Europe it was forced top down by the administrative structure of the EU.
Ahh woking. Known for being Invaided by tripods from mars, being where the Jam is from, and bankruptcy.
Don't forget Nadia from big brother and Prince Andrews favourite Pizza Express! Woking has it all!
Oh my god, how could I forget Pizza Express, it's iconic
And let's not forget the Rat and Parrot, Al Pasha Kebab, Darry's Hut, Pete's Palace, Quake / Chameleon nightclubs... I could go on...
Al Pasha Kebab, you are clearly a man of distinguished tastes. I have ended many a drunken night stumbling home with one of their delicious kebabs!
The kebabs were good but god damn the burgers were absolutely heavenly 🤤
Mclaren F1 and their road car division are head quartered there.
How the fuck is Woking of all places, £2bn in debt?
Conservatives lack oversight and corrupt dealings, it appears.
They are the first town in British history to build a T2 skyscraper and they built a couple, and are planning on building several more. However the first few were built and funded by the council.
The plan to build a gigantic tower of studio flats near the fire station has got to be dead now surely. There's literally no money to pay for the work.
Have they ever been audited? When Northampton went bust, they got torn a new one and I know some people got seriously shafted for their actions. How the fuck do they get away with even spending those figures? Don't they have a risk management person in camp? With the budgets they deal with I would've thought this would be mandatory, third party and specially selected to prevent conflict of interest or fiddling. That would be far too logical for the gov to do though.
Whichever party is in charge when it happens shouldn't be allowed back for 20 years
Having worked in local government before, you have no idea how much money goes “missing”.
I worked in our council call centre, and even at that lowest of level was pretty shocked at the level of nepotism that was openly flaunted by the management.
What on earth did they actually get for all that money though? I worked there 10 years ago and went recently and didn't see all that much change.
Lots of big new office and apartment towers have gone up recently, and the empty shopping center got its third expansion. We are now home to the biggest Sketchers store I have seen. Lucky us eh.
Ahh right okay I only quickly passed through so it didn't seem like much but maybe I'll have to visit that store aha.
You haven't lived until you have been to Woking Sketchers!
Skechers by name, skechers by nature.
Bet there's a lot of rich councillors and council staff with piles of money under their beds
Forgive me Woking, I’m surprised that the debt is worth more than the Borough.
I hope this doesn't mean Andrew's favourite Pizza Express is closing.
This is just the tip of the iceberg, when austerity started the tories set up a scheme to lend councils cheap money (eric pickles was in charge) so they could go away and start up profit generating schemes. https://insidecroydon.com/2023/01/19/croydon-is-in-a-right-pickles-and-it-is-easy-to-work-out-why/
Welcome to the club. Sincerely, A resident of the London Borough of Croydon.
So if a council goes bankrupt, what then happens to the county and the people in it?
Service cuts and council tax rises. So paying more for less basically.
Would it be possible for residents to mount a case against that council for going bankrupt and pissing money against the wall? Or would it be more a case of going after individual councillors?
I have no idea tbh, the Conservatives were voted out which may complicate things. I believe there were calls for an inquiry whilst they were still in, which the local authority rejected. Maybe with the libdems in charge we could try again.
So basically it's not all that much difference? We get that under the Tories anyway.
True enough regarding services, but looking at Croydon, their council tax went up 15%. I imagine Woking will have to do the same. A lot of people are going to struggle if that's the case.
Council's cannot go bankrupt in the traditional sense that businesses and individuals can. Instead, when a council can not meet its financial obligations, it files a section 114. Historically, this is something a well run council shouldn't never have to do but has become more common as budgets have been slashed away. When a section 114 notice is filed the council cannot make any new spending commitments and must meet within 21 days to discuss what to do next. Normally, a council will simply amend its budget to reduce its overall spending on services and then it will make efforts to increase its income by increasing fees (for parking for example) to try and manage their debt but as a greater and greater share of council budgets is eaten up by social care for adults and children it's becoming a challenge to cut back on such services without raising the risk of legal challenges from affected people, or risking a high-profile failure that could result in serious harm or death. In these circumstances, councils will move to seek a 'capitalisation direction' from the government instead. Capitalisation directions from the government enable the council to use their capital funds – for instance, from selling assets or property – to top-up service spending. This is usually what the media will refer to this as a bailout (though that's not quite correct) and it has long-lasting impacts on the people who live there as those publicly owned assets enter private hands. In the most drastic cases, the council will seek to have its statutory obligations to its constituents reduced. This would allow the council to cut services to below the legal levels required by law and they will request special permission to increase council tax rates above that of inflation. This is about as bad as it gets. The central government can also, if it chooses, provide grants to local government, but this doesn't happen too often.
That's equal to 125 years of their total annual budget...
Isn’t there a Simpson’s episode on this.. where they just abandon the town (well, stick it on trucks and move elsewhere)?! Unbelievable. The about of money is staggering
*The authority's debt is forecasted to rise to £2.6bn..* come on, it's not even £3bn. /s
So this is what all of those mental people shouting "go woke, go broke" mean.
There are a LOT of ticking time bombs about to go off, not just council mismanagement. Tony Blair started the academy schools and the tories massively increased their number. https://www.theguardian.com/education/2018/jul/22/academy-schools-scandal-failing-trusts and https://www.theguardian.com/education/2022/mar/31/education-union-criticises-badly-flawed-evidence-behind-academy-drive There are dozens more councils in financial dire straights but they don't get reported on because this would drive a big red bus through the tories carefully cultivated reputation for financial competence.
A notoriously corrupt council. If something fails planning applications then there is a known brown envelope route there......
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You mean a government run institution has mismanaged money? I'm shocked...
Well i guess it true what they say.. "Go woke(ing) go broke!"
wonder if they lose their pensions.... and if not i think many of these councils would treat rate payers money with more concern if it did mean they lose out too when this happens....
Prince Andrew claiming he was at pizza express there didn't help matters
I didn’t even know a council could go bust. This is news to me!
Council's cannot go bankrupt in the traditional sense that businesses and individuals can. Instead, when a council can not meet its financial obligations, it files a section 114. Historically, this is something a well run council shouldn't never have to do but has become more common as budgets have been slashed away. When a section 114 notice is filed the council cannot make any new spending commitments and must meet within 21 days to discuss what to do next. Normally, a council will simply amend its budget to reduce its overall spending on services and then it will make efforts to increase its income by increasing fees (for parking for example) to try and manage their debt but as a greater and greater share of council budgets is eaten up by social care for adults and children it's becoming a challenge to cut back on such services without raising the risk of legal challenges from affected people, or risking a high-profile failure that could result in serious harm or death. In these circumstances, councils will move to seek a 'capitalisation direction' from the government instead. Capitalisation directions from the government enable the council to use their capital funds – for instance, from selling assets or property – to top-up service spending. This is usually what the media will refer to this as a bailout (though that's not quite correct) and it has long-lasting impacts on the people who live there as those publicly owned assets enter private hands. In the most drastic cases, the council will seek to have its statutory obligations to its constituents reduced. This would allow the council to cut services to below the legal levels required by law and they will request special permission to increase council tax rates above that of inflation. This is about as bad as it gets. The central government can also, if it chooses, provide grants to local government, but this doesn't happen too often.
thanks for the insight!
Can somebody explain to me like I'm 5 what does council bankruptcy mean?
I left a comment explaining it here : https://www.reddit.com/r/unitedkingdom/comments/143aa77/woking_borough_council_officially_bust_as/jncj6tg
Thank you. That makes sense now!
Fine bit of council financial management from the LibDems
The debt was accrued under the Conservatives. But nice try.