OPINION

We must stop Brighton and Hove from going bust and becoming Croydon by sea

Posted On 16 Jan 2021 at 6:42 pm

The Greens and Labour risk bankrupting Brighton and Hove and turning it into the next Croydon if they keep up their recent pattern of financial decisions.

Labour-led Croydon council recently declared effective bankruptcy by issuing what is known as a “section 114 legal notice”.

Its auditors issued a “report in the public interest” shining a spotlight on where the council had gone wrong.

The report contained important lessons for the coalition of Green and Labour councillors as Brighton and Hove City Council prepares to set its own budget next month.

Lesson #1 – Investing in companies puts taxpayers at risk

The report in the public interest draws particular attention to how the council’s approach to borrowing and investments, including investing in companies, exposed the council and future generations of taxpayers to significant financial risk.

We have seen too many examples of this approach locally, with continued use of the i360 model, where the council takes on all the risks normally incurred by businesses by borrowing money from the Public Works Loan Board, with all the associated risks carried by taxpayers.

A case in point is a recent sale and leaseback deal agreed by the council’s Policy and Resources Committee in October.

As a result of this decision, taxpayers now have a stake and bear the burden of risk for a predominantly American-owned pharmaceutical company.

Decisions like these, made by the Greens and Labour, are not in the taxpayer’s interest.

Lesson #2 – Housing subsidiaries carry significant risk

The report also shows that Croydon took on risks by loaning money to a housing subsidiary of which none has been repaid.

Brighton and Hove City Council recently made a decision to link itself with a private development company that couldn’t make its own housing development proposals viable.

I’ve never been in favour of the council doing these deals with private companies – I believe free enterprise is there for a reason. They fund themselves, look after themselves and rise and fall by themselves.

It is not for taxpayers to take on or underwrite this risk. Taxpayers in Brighton and Hove will now bear additional risk for this housing development company going forward.

Lesson #3 – Significant overspends are unsustainable

The Croydon budget monitoring reports significant overspends by the council in 2019-20.

Over the past 12 months, local media in Brighton and Hove have reported on several examples of overspends in Brighton and Hove City Council as a result of policy decisions or lack of attention to service delivery.

These include

  • £10 million on the ideological council decision to ‘insource’ the city’s housing repair service, currently subject to ongoing industrial action.
  • £1 million on Labour’s meddling with the city’s Home to School Transport policy on similar ideological grounds which resulted in the collapse of a service for disabled children to get to school.
  • £3 million overspent at Cityclean in the two years to the end of March, with auditors saying that they had not been able to count all the costs of the problems with the council service.
  • £800,000 when the six months of measures resulting from Labour and the Greens’ controversial decision to close Madeira Drive and implement the A259 cycle lane were in place, money which would usually go towards concessionary bus passes for the disabled and over-65s as well as subsidising bus routes.
  • £3.3 million on an administrative error affecting local schools – the council has said that it will pass 43 per cent of the costs of this error on to schools with local taxpayers picking up the rest of the bill.
  • £1,200 a day for six months on a temporary housing director employed by Labour.

These examples reach a total of £16 million in self-inflicted harm from council mismanagement and policy failures, outstripping the council’s declared budget shortfall for next year.

Lesson #4 – Councillors must provide proper rigour and scrutiny

The Croydon report said that the council failed to show rigour, with insufficient scrutiny from members of the financial risks in the budget.

It also said the council’s financial governance was focused on lobbying government for additional funding, not containing spending within the funding provided which was its statutory duty.

This certainly rings true in Brighton and Hove where, since 2019 the official opposition has also been part of a coalition with the administration and therefore unable to provide the level of scrutiny expected by residents.

At the same time, both Labour and the Greens have taken a blame game approach to finance – blaming the government for any financial position that it finds itself in rather than taking proper responsibility and ownership or managing the city’s budget.

The council is reaching the point where it cannot afford any further self-inflicted harm if it is to balance its books.

The city cannot afford any more mistakes based on ideology, such as insourcing housing repairs, meddling with home to school transport or stopping cars from parking, which break the budget.

Recent proposals like paying volunteers are examples of ideas that should be dropped.

Green and Labour councillors in Brighton and Hove must learn lessons from the Croydon report – and fast.

Councillor Steve Bell is leader of the Conservative group on Brighton and Hove City Council.

  1. Chaz Reply

    Just the kind of prescient and mature comment we need.
    We have had enough of the children running B&H for a joke.
    Labour Loons and Green Goons have been warned. Stay tuned.

  2. Andy Richards Reply

    Hmmm..how strange that you should pick on Croydon rather than Tory Northamptonshire….or Tory Surrey…..or Tory East Sussex……

    • Ian Taylor Reply

      It is beyond hilarious that this Tory is telling us large overspends are unsustainable whilst there should be proper rigour and scrutiny when his government had almost doubled the national debt prior to this pandemic and have increased spending even more massively since whilst handing out billions of pounds of contracts with little due diligence and often to Tory Party cronies!
      As for housing subsidaries this Tory governments failed housing policies have led to the taxpayer propping up the housing market and thus the UK economy by such rubbish schemes as Help to Buy and Shared Ownership whilst the developers make fortunes with rip off prices for rabbit hutches sold on leasehold terms all at our expense!!

  3. Greens Out Reply

    The old saying (if it’s even allowed to be said in Brighton) is ‘Pay peanuts get monkeys’

    Unforunately the Greens and Labour councillors have had their heads in BHCC troughs for so long we’re paying gold bars and getting creatures with less intelligence than single celled organisms. In fact, Phelim may even be single celled. He only has one single thought.

    Why should we, as the people that pay for these utter imbeciles be treated so damn appalingly by them?

  4. Peter Challis Reply

    It’s time to get politics out of local government and just have independent councillors elected by, and accountable to, residents, working together with the objective of supporting businesses, residents, and the local economy and encouraging lucrative businesses and visitors to come here.

    What we don’t need is local councillors selected and controlled by political activists, with delusions of grandeur, debating Britain’s nuclear deterrent and thinking they can solve the globally climate crisis by installing cycle lanes.

    • Chris Reply

      I agree Peter. Councillors should only be concerned with local services and issues. I find it irksome when they are referred to as “local politicians”

      Vote independent, based on the experience, skills and aims of a Councillor.

      I also believe that they should be paid better, and also be held accountable much as a company director can be.

    • Jim de Rennes Reply

      Absolutely correct. You only have to read the bigoted comments of contributors on both sides of the Conservative/Labour divide to despair for the future of the City

  5. Keith Reply

    The fist two paragraphs read like a Tory press release. Stopped reading. How about you work with the elected councillors instead of running in campaign mode?

    • Greens Out Reply

      Because the ‘elected’ councillors are absolute morons

  6. Mal Tester Reply

    Brighton Council and the Greens are only really interested in turning the City into one big glorified pedestrian precinct. Nothing the Council has ever done in the City regarding traffic and parking has ever been any good, just making a bad situation worse. Sometimes I get the feeling the Council alter traffic and parking for want of something better to do.

  7. michael robins Reply

    only interested in studnt accomadatoin no time for its own citzens you got about 25000 people wanting homes do something not painting lines on roads for cycles and i ride abike

  8. bob Reply

    Steve Bell, just another Tory on a mission to divide and conquer I bet.

    Try telling the Tories to not cutt funding to BHCC by 21% since you came into power, and maybe we’d all have a better environment to live in, oh and while you’re at it can we have the 22,000 Police officers back that the Tories cut since 2010?

  9. John Wilson Reply

    Bob,if central gov gave BHCC billions more in funding it would be wasted.Unfortunately they have little or no experience of the real world.Our Councillors and MPS are career politicians with hardly any interest in residents of B&H.We need local independant Councillors with business experience.
    Councillors who actually care about B&H.Potentially we could be a top tourist resort again but unfortunately because of naive and selfish dogmatic decisions being made we are losing our way.

  10. Neil Reply

    Bit dishonest about the loss of parking revenue, given that 3 out of the 6 months were during the national lockdown. Can’t comment on the other costs, but if he’s stretching the truth on this, I can’t help but think he’s not being entirely straight about everything else.

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