New measures on council finance
The news that Nick Clegg will announce this afternoon new measures on council finance, to allow councils to borrow more against future income, will be hugely welcome to many Lib Dems here.
Probably more so than for the Conservatives or Labour, councillors are the bedrock of this party. Hundreds of them are here this week, a substantial chunk of the conference audience.
And many of them terrified they will lose their seats next May, especially when the effects of cuts on local government become fully known in a few weeks time.
So anything that can ease the financial problems of local authorities is bound to be hugely welcome amongst Mr Clegg's audience today.
I'm Michael Crick, and I'm Newsnight's political editor. My guiding rule is that in any story there's usually something the politicians would prefer the world not to know. My job is to find that out. Follow me on
Comment number 1.
At 20th Sep 2010, BluesBerry wrote:Allowing councils to borrow against future income may be hugely welcome to many Lib Dems, probably more so than for the Conservatives or Labour councillors, but I would say DON'T DO IT.
Borowing against future income was the bedrock of the subprime mortgage catastrophe. Borrowing against future income is why so many people owe so much on credit cards. Borrowing against the future resulted in a negative default (sovereign bet) against Greece. Borrowing against the future is dangerous.
Who knows what the future will bring?
You may just end up borrowing in the future to cover what you borrowqed in the past. In my book, it's pay as you go.
Councils are exerting pressure.
I would agree that councils could use wider tax-raising freedoms, at least sufficient to cover the estimated Β£50bn/year needed to maintain such things as transport, housing, energyβ¦
Local Governemnt Association Chair Baroness Margaret Eaton said: βDespite the extremely tough financial climate we need to avoid storing up big bills for the future.β
Agreed.
Perhaps investors in municipal bonds raised specifically for infrastructure, could be given a tax break. Bonds are permitted but rarely used by municipalities, since they are more costly for councils than borrowing from the government. We need to change this picture.
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Comment number 2.
At 20th Sep 2010, jauntycyclist wrote:if the subsidy of 4 billion a year to millionaire landowners was axed then the council tax could be axed. moving money from the rich to the poor is a massive vote winner. yet its not being done? so the govt isn't that progressive when it come to millionaire landowners whom it thinks shouldn't be rowing on the oars but be paid passengers. why is that?
because its a government of a class for a class? A tribe for a tribe? The uk is still under norman occupation. Its laws, oaths, symbols are those of the norman conquest and they are carrying on in the same old way making sure they are allright jack.
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Comment number 3.
At 20th Sep 2010, Cassandra wrote:Michael - first tinme I have found your blog.
Is there a reason why I now find it more easily?
Is Nick moving on? It might explain his recent fascination with celebrity.
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Comment number 4.
At 21st Sep 2010, Isatou wrote:Hell hath no fury like Labourites scorned by the Lib Dems.
What a laugh !
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