Hounslow (Parliament Politics Magazine) – Hounslow Council Leader Shantanu Rajawat addresses criticism of the borough’s financial management, reaffirming transparency and fiscal responsibility.
Two opposition councillors, Conservative Cllr Jack Emsley (Chiswick Homefields), a member of the Council’s Oversight & Scrutiny Committee, and Independent Cllr Theo Dennison (Syon & Brentford Lock), a former Labour Cabinet Member for Finance, have written guest blogs in recent weeks that both criticize the Council’s debt levels and its management of the Lampton Group, the authority’s wholly owned company.
In his response, Labour Council Leader Shantanu Rajawat disputes their assessment of Hounslow’s financial situation and maintains that the borough’s borrowing and investment policies are still sensible and long-term.
Opposition Councillors Emsley and Dennison have been making outrageous and false assertions about the Council’s finances in their articles over the past few months.
In the lead-up to next year’s elections, both Cllr. Emsley, a Tory, and Cllr. Dennison, an Independent, is trying to make quick political points.
The topic of council finance may appear to be obscure and complex. Cllr. Emsley’s ignorance of our financial circumstances is something I can overlook. But Cllr Dennison needs to be more aware.
Regarding debt, almost one-fifth of the council tax revenue of the 254 municipalities that answered a recent FOI request is used to pay interest on debt. Compared to what we pay in Hounslow, that is significantly greater.
The Council owns the Lampton Group. It provides services including trash collection, park and recreation facility upkeep, and above all their social housing programs.
Homes leave and money enters. That’s truly all there is to it.
They are able to offer services that would be too expensive to bring in-house thanks to Lampton. It allows them to have more control over such services and eliminates the need to rely on pricey outside providers who benefit handsomely from the public coffers.
They pay Lampton more interest when they lend them money than they do when they borrow money to make these loans. For the General Fund, this represents a net positive return.
Cllr Dennison is aware of this despite his phony indignation. When many of these loans were agreed upon, Councillor Theo Dennison was the Cabinet Member for Finance.
Councils typically use borrowing to provide for the needs of their constituents.
You don’t say you’re in a financial “black hole” or laboring under “a debt mountain” when you take out a loan to purchase a home. You get your own house. You have a precious asset now.
In Hounslow, it is the same. In order to address the housing crisis, borrowing has enabled us to construct respectable and reasonably priced dwellings. It entails actual, physical “assets” houses for their citizens and assured rental revenue for the Council.
As more people turned to local councils for support due to Tory austerity, this resulted in a greater strain on council taxpayers.
Social care and other statutory services receive about half of your council tax. They are required by law (and morality) to offer these services. The expense to the local government increases in tandem with the demand for these services.
Additionally, inflation raises the cost of these services. The Council loses over £4 million for every 1% increase in inflation. Inflation peaked at 11% under the Conservatives.
The Conservatives had the audacity to gripe about our financial situation after 14 years in which the cost of living skyrocketed, public services were cut, and towns like ours were hardest hit.
What are proposed measures to address the council’s budget shortfall?
Adding Council Tax and some freights and charges to induce fresh profit. Investing in longer- term metamorphosis systems similar as digital services upgrades and property rationalisation to ameliorate service delivery and reduce costs.
Prioritizing protection of frontline services while balancing the need to live within its means. Enhancing fiscal operation and translucency, including engaging with residents on budget opinions. Exploring innovative income aqueducts and business openings to condense traditional profit sources.
Rajawat stressed that Hounslow Council is concentrated on guarding frontline services while balancing the budget and investing in crucial areas similar as casing, education, and community safety. He underscored sweats to ameliorate effectiveness and induce fresh income aqueducts without disproportionately impacting vulnerable residents.