Residents First

Council debt keeps falling

Reducing our longstanding debt is the council’s first priority so that costly interest repayments to the banks can be reduced and taxpayers’ cash can instead be spent on vital public services.

To make it easier for residents to keep a track of the progress we are making in cutting our historic debt we are publishing a quarterly ‘debtometer’ on this web page.

The amount owed by the authority has been falling steadily since its peak in 2004 when the council owed an eye-watering £176 million – costing £9.5million a year in interest repayments.

Since then, the authority has worked hard with a range of efficiency measures to cut its debt to £111 million at the start of the current financial year (2012/13) – but that still drains around £3.9 million in annual interest payments before a penny is spent on services for the public.

Future of Irish Centre secured

The future of the Irish Centre has been secured after Hammersmith & Fulham Council struck a deal to sell it to the centre’s board of directors.

The Irish Cultural Centre, Hammersmith (ICCH) has agreed to buy the building, after they were able to raise funds and secure a loan from the Irish government.

The centre will now be redeveloped to provide a new Community Centre on the lower floors with residential accommodation on the upper floors. There will also be a café, bar, concert hall, offices, classrooms and rooms for hire, subject to planning permission.

H&F Council agreed in February 2011 to sell the centre on Blacks Road and seven other buildings in order to reduce its historic debt which at the time stood at £133 million.

Council launches debtometer

Millions of pounds are being freed up for vital frontline services as the council looks set to hit its target of halving its historic debt mountain by 2014.

Hammersmith & Fulham (H&F) Council’s debt reduction strategy, which includes moves to sell under-used council buildings, is set to wipe another £12million off the town hall’s debt burden by April 2012.

The news comes as the council launches a new quarterly online ‘debtometer’ so that residents can keep a track of the progress made in reducing municipal debt.

The amount owed by the authority has been falling steadily since its peak in 2004 when the council owed an eye-watering £176 million – costing £9.5million a year in interest repayments.

Since then, the authority has worked hard with a range of efficiency measures to cut its debt to £122million at the start of the current financial year (2011/12) – but that still drains around £4.3million in annual interest payments before a penny is spent on services for the public.

Today the council announced that it expects to wipe another £12 million off its longstanding debt by the end of this financial year and says it is ‘on track’ to halve its historic debt by April 2014.

Cllr Stephen Greenhalgh, H&F Council Leader, says:

“Nationally and locally we have seen the dangers of excessive debt and we are the only council in the country that is consistently cutting council tax and lowering the council's debt!

“Spending millions of pounds on costly interest repayments to the banks just to stand still is economic madness and is a ticking time bomb if interest rates rise – as they must do at some stage.

“Therefore our strategy for the past five years has been to reduce the council’s historic debt so that taxpayers’ cash, which had been spent servicing interest costs, can be redirected to protect frontline services like caring for the vulnerable, child protection, street cleaning, more Police, schools and parks. Only by cutting debt can we secure the strong financial future that the borough deserves and this year’s progress means we are on track.”

Like councils across the country, H&F Council is under serious financial pressures as a result of the national debt crisis and the council has tightened its belt by shedding around 1,500 jobs since 2006 and is also selling underused buildings and combining services like libraries and children’s services with Westminster and K&C.

“In H&F we are proud of the services we deliver while reducing council tax,” continues Cllr Greenhalgh. “Our services are judged to be amongst the best in Britain, while last year we recognised as the best local authority in Britain. But with our debt burden, we are achieving this with one hand tied behind our back.

“The council has been shrinking for some time and we no longer need the vast swathes of office space we once had. Our focus will be on using the buildings we own in the most efficient way possible. If a building is underused and can be sold to reduce our credit card bill it will be sold. The days of having a council building on every street are over – our residents want quality services, not bricks and mortar which are often underused.”

Fulham Town Hall is hot property

Plans to sell Fulham Town Hall are gathering pace with 11 parties registering their interest in acquiring the building.

The Grade Two Listed property was put on the market in May and the majority of prospective purchaser bidders are considering a combination of mixed use schemes including hotel, retailing and residential uses.

Built in 1888, Fulham Town Hall is one of eight buildings across the borough that H&F Council is selling in order to reduce its historic £133 million debt burden, which is costing taxpayers around £5 million a year in interest payments.

The council also has to make £65m of savings in the next three years and the  majority of people who responded to a consultation held last year agreed that it would be sensible to sell the building so that more money could be directed towards vital frontline services. If the council was not to sell the Town Hall, it would cost the taxpayer £7 million over the next five years just to maintain it to present standards.

The council, together with commercial property consultants, Lambert Smith Hampton (LSH) will now be scrutinising the bidders' proposals before selecting a shortlist who will be invited to present detailed submissions. The council hopes to announce a preferred bidder in December, who would then start to prepare planning and Listed Building applications.

Apart from attempting to seek the best price possible for the building, the council and LSH will be looking for the bids that best take the historical character of the building into account, before making a decision to shortlist.

H&F Council is committed to retaining the heritage and historical identity of the Town Hall and hopes the eventual conversion will allow significant parts of the building to be available for public use in the future.

The Labour Party's own debt mountain

Cllr Harry Phibbs writes:

Interesting piece in Total Politics magazine by David Hencke on Party finances. Labour's debt mountain consists not just of bank loans but also loans from their plutocrat backers:

"From the beginning of August this year to September 2015, multi-millionaires Richard Caring, Ron Aldridge, Nigel Morris, Derek Tullett, Chai Patel, Sir David Garrard and Barry Townsley are
receiving 6.5 per cent interest on a total of £9.3m loans. This is nearly 2.5 per cent above the current Which? best buys for four-year guaranteed fixed-rate savings from the Halifax and ICICI banks, and will net the seven donors a total of over £600,000 a year – promising them over £2.4m in interest payments when the loans are repaid. All this servicing of debts will have to come out of party income, with, ironically, poorer party members subsidising cash returns for the wealthy at rates no ordinary person can get."

So before any of the money paid in membership subs by ordinary Labour Party members goes on campaigning, or research or front line membership services, it goes to provide £600,000 to a handful of very rich people.

Don’t panic, don’t panic says Labour’s ‘Corporal’ Jones

Cllr Andrew Johnson writes:

That’s the message from Labour’s ‘Corporal’ Jones in what is increasingly becoming a Dad’s Army style approach to tackling the Council’s debt crisis following a speech during last week’s budget council meeting by Labour’s self-styled ‘economic policy guru’ Cllr Andrew Jones. For not only was the speech inaccurate in many respects, but rather more worryingly, it was given a councillor who in the outside world is supposed to be an economics professor.

Given his position it was not unreasonable to expect Professor Jones to produce a detailed critique of the current crisis and at least the articulation of some credible alternative suggestions to enable us to tackle both Andy Slaughter’s debt bill, and the funding cuts imposed upon us to clear up his ex boss Brown’s spending spree. Yet if the professor had a plan he was clearly keeping it to himself, and far from giving us an insight into his economic wisdom all we got was a statement which if I were one of his economics students I’d be asking for my tuition fees back.

One of the top corkers was that effectively the council shouldn’t be paying off its debt quickly at the present time, this despite the fact that interest rates are low and are only likely to go up from now on. Clearly however, Professor Jones hadn’t factored this into the equation and would be more than happy for our current £5m a year interest bill to go up markedly if we were to adopt his strategy.

The chutzpah of Cllr Cowan

Cllr Harry Phibbs writes

Shepherd's Bush blogger Chris Underwood makes the extraordinary comment on his blog last night that Cllr Stephen Cowan, the Labour Group leader on Hammersmith and Fulham Council, "doesn't really do chutzpah."

Chris, chutzpah is in Cllr Cowan's DNA. It's his middle name. His irreducible essence. He is the physical manifestation. The embodiment of chutzpah. Cllr Cowan is chutzpah made flesh.

Cllr Cowan's speech last night was pretty typical. He complained that the Council employed too many HR managers. When the Conservative administration took over from Labour there was a total HR headcount of 100 posts at a cost of £4,612.834.  HR headcount has been cut over time and today it is down to 47 posts (a total reduction of 53 posts) costing £2,816.300. This has resulted in a total saving of £1,796.534.

He complained too much was spent on communications.

Yet under Labour Communications spending was £1.14 million. We are halving that cost. According to an Evening Standard survey our total spending on publicity at £669,000 is the second lowest of the 32 London boroughs. Only Bexley spends less. Southwark spends over £5 million. We have slashed spending on spin and cut the number of Communications staff from 13 under Labour to seven. The cost of h&f news is much lower than the previous Council publication HM Magazine which cost £400,000 a year.

6,159 Borough residents pay exclusively for Andrew F. Slaughter

Cllr Andrew Johnson writes:

No, it’s not some sort of sell-out concert to hear the collected thoughts of the esteemed MP for Hammersmith, it’s what the true legacy of one Andrew Francis Slaughter means to 6,159 residents of Hammersmith and Fulham.

For before the council has spent a single penny on providing services that’s where all their council tax will have gone thanks to Slaughter’s debt rampage during his time as Britain’s high paid Council Leader. So when people ask ‘what do I get for my council tax, 6159 people now know – paying off this guy’s legacy.

Yet, as demonstrated at last night’s meeting of the full council Andy Slaughter, and his side-kick Cllr Steve Cowan, apparently have no shame that they left the council with a debt interest payment of £10m per year, when they were booted out of power in 2006, and even now don’t see the £5m repayments as being a particular problem.

A common sense budget

The Council leader, Cllr Stephen Greenhalgh, made the following speech at last night's Council meeting presenting the budget

“We are facing an unprecedented economic crisis. Unemployment is rising and the tax base has collapsed in Britain. Cuts in public expenditure are inevitable at some point. Even if the Chinese
would keep lending us money, it is immoral to keep saddling the next generation with debts just because the current generation does not want to face reality.”

Those were the opening words that I used to propose H&F’s council 2009 budget. They provide the context for why the 2011/12 budget has been the hardest of all budgets to set.

The national speeding squeeze means we need to find substantial savings in response to the UK’s national debt crisis. Back in 2006 public spending was 41% of GDP. Now it is close to 50% if GDP with a national debt of £1 trillion which was only £500 billion five years ago. Interest payments are £43 billion this year which is more than the annual expenditure on defence.

Locally, our challenge is to save £28 million in 2011/12 – rising to £65 million over the next three years.

Decision due on sale of council buildings

H&F Council’s Cabinet will decide on 7 February whether or not to sell nine council buildings in order to help pay off its £133 million historic debt and reduce the impact of the public sector funding squeeze on its frontline services. Debt costs the council £5 million in interest alone per year.

A detailed consultation was carried out over the Autumn on the proposals and on the relocation of services and organisations affected.

The report recommends that Cabinet:

•approve the sale of Fulham Town Hall, Palingswick House, the Distillery Lane centre, 58 Bulwer Street, Askham Centre and the Greswell centre;

•approve that leases on Cambridge House, Barclay House and 20 Hammersmith Broadway are not renewed;

•revoke the Cabinet decision of January 2009 to extend the lease of the Irish Cultural Centre so that it can be offered for sale to the sitting tenant – the Irish Cultural Centre Hammersmith Ltd.

•defer the decision on 50 Commonwealth Avenue pending the outcome of the Day Opportunities review and until an alternative site is agreed for the existing occupants.