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How to avoid Croydon council's fate
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The TaxPayers' Alliance has tirelessly campaigned against councils wasting public funds. As part of our efforts I'm delighted to announce I will be writing a fortnightly column for ConservativeHome detailing how local authorities spend your money.
For my first article I examined why Croydon council ended up bankrupt. It's been on our radar for many years. When I first met local activists the Croydon Constitutionalists, I was stunned by the dire state of the authority's finances.
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But how did things get so bad and how can other councils avoid this fate? A combination of a hapless housing project, ill-judged investments, and wanton waste are to blame.
The council had ambitious plans and was prepared to risk more than a billion pounds of taxpayers' money in the process. It created a housing company called Brick by Brick in the hope of building 500 homes a year. Despite taxpayer-funded loans to the tune of £214 million, to date it has only built 283 homes combined with losses of nearly £775,000.
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A risky investment strategy, still leaves the council owing over £900 million to the Public Works Loan Board. Add to this council bosses with limited financial expertise and it's not hard to see how things quickly turned south. To top it all off, Jo Negrini, the chief exec who oversaw the massive build up of debt, left her council job with a reported golden goodbye of £440,000!
Now, more than ever the country can't afford to increase the burden on ratepayers. If councils relentlessly focus on their core responsibilities they can avoid becoming the next one to go bankrupt.
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TaxPayers' Alliance in the news
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There's no such thing as a free lunch
The Scottish National Party has made a pre-election pledge to offer free school meals to almost all primary school children. No-one wants pupils to go hungry but with an estimated annual cost of £230 million, some scrutiny should be applied.
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Asked for comment by The Scottish Mail On Sunday, our research director Duncan Simpson questioned the blanket policy, "No doubt this is welcome news to many children and parents across Scotland, but it is curious that the Scottish Government feels the need to feed kids at school. The absence of means testing and the universal nature of it is a concern."
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Businesses face VAT hammer blow
In September and very much under the radar, the Treasury published plans to change the tax system for duty-free shopping. We've calculated it could cost UK residents an extra £12.1 million a year in tax.
In a very thorough article for CapX, TPA policy analyst Darwin Friend sets out exactly why the government should think again. He argues that many jobs will be at risk, "London airports alone have estimated that over 5,000 jobs could be lost." But it isn’t just London, "The impact of this change will be felt across all the regions of the UK."
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Darwin makes crystal clear what should be done instead, "Rather than enacting this unnecessary and harmful change, the government should be straining every sinew to drive growth. There are plenty of ideas going round – including our own package of pro-jobs, investment-boosting tax cuts and common sense deregulation – but cutting off the customers which so many industries rely upon is not one of them."
Britain's economy must not be left to stagnate post pandemic. The TaxPayers' Alliance continues to make the case in the corridors of power for simpler and fairer taxes.
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Aide memoire: the next steps to fix foreign aid
Following our policy victory on foreign aid spending, TPA policy analyst Jeremy Hutton has used his considerable expertise on the subject to discuss what the government should do next. He explains that too much of Britain's aid spending goes to waste. Although this doesn't stop pro-aid lobbyists calling for more spending!
There are several issues with the foreign aid target. For example, the most avoidable problem of all, is meeting the target according to the calendar, rather than the financial year, "This can leave the UK with piles of money it must rush to spend at the end of the calendar year. Instead of spending taxpayers’ cash on worthy aid programmes, it ends up going to multilateral organisations without specific projects in mind."
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So what can be done? One option would be the implementation of a "tolerance range" of 0.1 per cent above or below the target, or through use of a multi-year rolling average would give scope to adjust spending the following year.
More common-sense measures like this are vital in further reducing the amount of taxpayers' cash that is wasted on foreign aid. Read what else can be done.
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Stamp duty: support the campaign to unlock homes
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If you haven't done so already please sign our petition calling for the rise in the stamp duty threshold to £500,000 to be made permanent. As things stand it won't be long before this stamp duty holiday comes to an end. The hard deadline of 31st March risks pushing the property market over the edge.
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Throughout our 16 year history we've consistently called for it to be abolished. A permanent cut in stamp duty will be a boon to many - tax cuts change lives, not just balance sheet. We will take this petition direct to the Treasury so please ask your friends and family to sign it too.
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A shining example
Good news for ratepayers in Invercylde as a council overhaul of street lighting is set to save over £300,000 a year. The local authority is upgrading existing lamps with modern LED bulbs.
Not only do these greatly improve the quality of light emitted but they also use less power - meaning they are good for the environment and less expensive to run.
It's great to see this sort of innovation and forward thinking. Councils all over the UK must be relentless at eradicating wasteful spending and ramping up efficiency. Residents are fed up of seeing inflation-busting bills every year. Anything that can be done to keep council tax as low as possible is greatly welcomed by the TPA.
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Harry Fone
Grassroots Campaign Manager
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