50% rise in council's debt charges sparks row (From York Press)
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50% rise in City of York Council's debt charges sparks row
9:39am Monday 14th January 2013 in News
By Mike Laycock, Chief reporter
A FORMER York council leader claims the authority’s debt charges have soared by more than 50 per cent in the past two years.
Liberal Democrat Steve Galloway said the Labour-run council is now paying an average of about £650,000 a month in interest on borrowed money.
He said this compares with £418,000 when his party was in charge before the 2011 elections, at which he lost his seat. But a senior Labour councillor has hit back, claiming the figures were not a like-for-like comparison, and blaming the Liberal Democrats for the rise.
Mr Galloway said interest rates during the period had been stable and therefore could not account for the rise, and he suggested the increase was a result of a “borrow and spend” policy by the Labour administration.
“The policy has echoes of the last Labour government which increased the country’s debt dramatically, a policy which was partly responsible for the subsequent economic crash,” he said.
“In York, a £20 million ‘Economic Infrastructure Fund’ has been set up. It is being used for a variety of projects but recently announced plans to purchase an arts barge and use borrowing to fund a ‘living wage’ have come in for particular criticism.”
He said that in total, the council would have to find more than £10 million during the next financial year to service its debts.
He said: “That is likely to be at the expense of further cuts to public service standards.”
Coun Julie Gunnell, cabinet member for corporate services, claimed Mr Galloway’s comments failed to reflect the fact that most of the interest payments currently made by the authority related to schemes agreed by the previous Liberal Democrat administration.
“It is those decisions that have led to increased interest payments for which we are now responsible and which we are successfully managing,” she said.
Comments(25)
atorycouncil2014
says...
10:28am Mon 14 Jan 13
Holy s***. if this is true we are seriously in the mire as the last lot didn't really borrow much. If these figures don't include the £20 million Calamity James has borrowed for his 'get me a safe seat' campaign then we can probably be looking at a further 50-100% rise in debt repayments over the next 12 months.
Anyone want to take a book on when York files for bankruptcy?
And where Calamity James will be surveying the wreckage from?
And how many pictures of Red Sonja will accompany the story?
Oaklands Resident
says...
11:01am Mon 14 Jan 13
They have admitted in the Press that they are borrowing £20 million more and that around £13 million of that is now committed (and attracting interest charges).
Its one thing the Council borrowing to invest if they know that their current account expenditure will be reduced. That was the argument used in favour of consolidating their activities into one office building.
But does anyone seriously believe that setting up an old barge as an arts centre is going to reduce the tax burden or even provide meaningful long term jobs?
Just freeze new expenditure, give taxpayers a break and concentrate on keeping core public services going.
capt spaulding
says...
11:17am Mon 14 Jan 13
atorycouncil2014 wrote:I will have a shilling on the side on that one
"most of the interest payments currently made by the authority related to schemes agreed by the previous Liberal Democrat administration."
Holy s***. if this is true we are seriously in the mire as the last lot didn't really borrow much. If these figures don't include the £20 million Calamity James has borrowed for his 'get me a safe seat' campaign then we can probably be looking at a further 50-100% rise in debt repayments over the next 12 months.
Anyone want to take a book on when York files for bankruptcy?
And where Calamity James will be surveying the wreckage from?
And how many pictures of Red Sonja will accompany the story?
goodfellow
says...
11:38am Mon 14 Jan 13
Jackanory2
says...
12:21pm Mon 14 Jan 13
Lunatic
says...
1:09pm Mon 14 Jan 13
Naturally, they'll pin all the blame on Labour.
south bronx red 2
says...
1:13pm Mon 14 Jan 13
Im glad the likes of Galloway have as much influence as any comment on these pages.
atorycouncil2014
says...
1:45pm Mon 14 Jan 13
Lunatic wrote:sorry who is it thats borrowed £13 million this year alone, and promised to borrow £20 million in their first term
Take into account the prior LibDem mismanagement, and the cuts to funding the ConDems are forcing on the council, and I'm not surprised.
Naturally, they'll pin all the blame on Labour.
meme
says...
2:07pm Mon 14 Jan 13
The question is how do we pay it all back?
Someone must take control and sort out what we really need to spend money on and what we dont!
Barges/people employed to encourafge old people to walk more/cycling officers/£1.5 million on new furniture for the new offices/even a 'living', not minimum wage, in these times of austerity may be desirable but not a necessity. We can only pay with money we have.... not borrow more. Everyone must act responsibly and it appears our present Coucil are not
TheTruthHurts
says...
2:47pm Mon 14 Jan 13
'
Wow.... just Wow
Kevin Turvey
says...
3:04pm Mon 14 Jan 13
It does not matter who is responsible the figures are dreadful
The question is how do we pay it all back?
Someone must take control and sort out what we really need to spend money on and what we dont!
Barges/people employed to encourafge old people to walk more/cycling officers/£1.5 million on new furniture for the new offices/even a 'living', not minimum wage, in these times of austerity may be desirable but not a necessity. We can only pay with money we have.... not borrow more. Everyone must act responsibly and it appears our present Coucil are not’
Exactly!
There is no way to dress this up so here goes!
These idiots that are voted in by us are absolutely useless!
They have no care about when or who will pay back the debt just that it will not be them!
It is well past time to get these self-serving imbeciles out of power.
It is really simple, no fancy tricks/techniques; even thicko councillors should be able to understand this:
Spend less than what you earn, just so the councillors/highly paid local government employees understand (that would be - take as council tax), then you have no debt! You may then be able to save some for when times are really bad!
Do not get loans from anybody!
Especially from the governmental equivalent of Wonga.com
If the leader of the council cannot balance his own finances then how is he going to be able to do the same or lead for a council?
These councillors/highly paid local government employees are responsible for deliberate financial mismanagement and should pay the ultimate price for that responsibility and failure, not rewarded!
It is values/behaviors like these that have led (what I really mean is deceived) this country into massive debt and living beyond its means.
James Alexander should resign or be sacked forthwith.
Eric Olthwaite
says...
3:13pm Mon 14 Jan 13
It seems that the so called powers at be have no respect for the electorate as they extend our debt run up by their actions/omissions without asking or indeed caring!
Time for them all to go now from all sides and replaced with non-idiots that are not just riding the gravy train.
No sweeteners/payoffs or other forms of money, just go!
Guy Fawkes
says...
4:19pm Mon 14 Jan 13
These idiots that are voted in by us are absolutely useless!
They have no care about when or who will pay back the debt just that it will not be them!
And therein lies the problem. The people whose library/swimming pool/meals on wheels service is potentially on the block are precisely the people (i.e. the small minority of the overall electorate) who will turn out and vote at council elections. Those whose main concern is keeping council tax and public debt down tend not to bother.
Added to which, Labour's core message is that any reduction in public spending whatsoever, however strong the case for it, comes under the heading of evil, heartless Tory cuts and cannot even be considered.
And, as others have pointed out, councillors (and other elected representatives) have no personal incentive to balance the books. Personally I'd like to see a system whereby for every 1% of national (or in the case of a councillor, regional or local) debt an elected representative presides over the increase in, their salary is cut by a corresponding 1%.
But the unaccountable taxing, borrowing and spending will only ever change if people who believe fundamentally in small government, low taxation and living within our means bother to turn out and vote.
capt spaulding
says...
4:23pm Mon 14 Jan 13
Eric Olthwaite wrote:No mention of bicycles or the spear and jackson no 4 shovel. Well done.
This is all about respect!
It seems that the so called powers at be have no respect for the electorate as they extend our debt run up by their actions/omissions without asking or indeed caring!
Time for them all to go now from all sides and replaced with non-idiots that are not just riding the gravy train.
No sweeteners/payoffs or other forms of money, just go!
Ex CYC
says...
4:34pm Mon 14 Jan 13
R'Marcus
says...
5:12pm Mon 14 Jan 13
It is his way. Blame, blame,blame everyone but not him.
Back and Beyond
says...
6:47pm Mon 14 Jan 13
betty swollox
says...
6:50pm Mon 14 Jan 13
1. apart from one they are all governed by the party they represent, the average person is not their priority, keeping whatever party they support happy is.
2. How many have experience of running a business?, which running the council and its budget is.Playing professional politics isnt want the people of York want
nearlyman
says...
7:05pm Mon 14 Jan 13
...This is socialism, have whatever you want someone else will pay.
nearlyman
says...
7:07pm Mon 14 Jan 13
nearlyman
says...
7:10pm Mon 14 Jan 13
able !
Buzz Light-year
says...
8:15pm Mon 14 Jan 13
R'Marcus wrote:He blamed the people of York for the idiotic bus lane on Fulford Road at Iceland and Aldi.
Big Steve blames everyone for the council's woes. He blamed the Tories and the Labourites when he was the LibDum leader. It is his way. Blame, blame,blame everyone but not him.
He said we weren't clever or proficient enough for it.
I don't care what else the arrogant so and so has to say on anything.
No respect.
Buzz Light-year
says...
8:19pm Mon 14 Jan 13
south bronx red 2 wrote:If only that were true.
After years of Liberals feathering their own nests, they have a cheek to point a finger. Im glad the likes of Galloway have as much influence as any comment on these pages.
Not just libdems but anyone with even half an axe to grind with JA will jump on Mr G's bandwagon if they think it will help with their agenda.
meme
says...
9:34am Tue 15 Jan 13
Thats £200 million!!
Although some 50% of that is core debt. The rest bought back the housing stock, I assume from Government.
Its a helluva figure whichever way its looked at
capt spaulding says...
10:11am Mon 14 Jan 13