Archive | February, 2012

Newham’s Debt Timebomb

28 Feb
Last year I wrote about the enormous debt racked up by Newham council in the ten years since Sir Robin Wales was elected as executive mayor.

As the result of recent correspondance with a local Labour party member, I thought I’d revisit the issue and explain a little more why it makes me feel so uneasy.

Of course public debt isn’t like personal debt, much as the Tories may try to persuade us otherwise. But equally local government debt isn’t like national government debt either. National debt for a country like the UK, which has a sovereign currency, is always ultimately repayable through creating new money (this is what the recent rounds of quantitative easing basically involved – creating new money to buy back old debt). Obviously it’s a last resort and can go disastrously wrong, as Mugabe demonstrated in Zimbabwe, but it means the UK can never go bankrupt and will never default on its debt.

But the same does not apply to Newham. We can’t print new money to pay off the debt, so the only options are taking on new loans to pay off the old ones or ensuring revenues exceed expenses and using the difference to pay down the loans. This latter option means raising taxes, cutting costs or a combination of the two. The former option will only work for so long, as eventually your line of credit runs out or the interest payments on the debt swell to an unsustainable point.

And it’s really the question of the interest that bothers me at this point. Sir Robin has been extremely fortunate to have been able to borrow and spend at a time of record low interest rates. If you look at the council’s accounts you will see that the cost of servicing the debt today, in cash terms, is the same as it was ten years ago despite the fact that there’s almost twice as much of it. But only a fool would believe that today’s historically low interest rates will last forever – or even for as long as the life of Newham’s loans.

So when interest rates start to go back up, the cost of servicing the debt goes up.

Where are those extra interest payments going to come from? Either more borrowing – which would be extremely foolish – or from revenues. Either council taxes have to go up sharply, or services have to be cut yet further. In Newham neither looks an attractive option: make some of London’s poorest people pay a lot more tax, or cut the services they rely on.

What Sir Robin has created is a debt timebomb. If he’s lucky, or astute, he’ll have moved on to bigger things (Lord Wales?) before it goes off. But the people who live and work in the borough will be stuck with the consequences.


View to the Med

28 Feb

on Instagram – February 28, 2012 at 01:40PM

Greenwich Peninsula

28 Feb

on Instagram – February 28, 2012 at 01:35PM


28 Feb

on Instagram – February 28, 2012 at 01:34PM


28 Feb

on Instagram – February 28, 2012 at 01:31PM

Trees in Bletchley

28 Feb

on Instagram – February 28, 2012 at 09:53AM

Misty morning in Milton Keynes

28 Feb

on Instagram – February 28, 2012 at 06:46AM

A Parish Council for Forest Gate?

20 Feb


In 2007, the Government passed legislation which permitted the creation of community councils in London, with the aim of enhancing community governance in urban areas. These new community councils would have similar powers to the parish councils that exist elsewhere across the country.

Central government – both this one and its Labour predecessor – wants to encourage localism, a greater devolution of power and decision making to the lowest possible level. A Government white paper last year set out support for new parish councils and made it clear they wanted to see more councils established to take greater control over local services

Already local residents in Queen’s Park and London Fields have started campaigns to set up their own councils to change their community for the better.

Would it make sense for us to have our own council in Forest Gate?

It wouldn’t mean leaving Newham, just having some powers transferred into the hands of local people and an ability to spend money on the projects we consider priorities. For example, the new council would have to be consulted on any planning applications, such as the one submitted by Obsidian for the re-development of our town centre. The lack of effective planning enforcement is something that has long blighted Forest Gate Town Centre. Other possible powers which could have a positive impact on how we as residents could improve Forest Gate include managing community and leisure centres, establishing a ‘village hall’, street cleansing and community safety. It may even be possible to take over the local parking provision to ensure that it better reflects the needs and desires of the local population. 

The new council would be funded by a precept – an additional amount of money collected alongside the council tax. It might also receive a grant from Newham to enable it fund services it took over from them.

In order to establish a new parish council here Newham, as the ‘Principal Local Authority’, would have to first undertake a ‘community governance review’. They could decide to do this themselves, or we can petition them to do so. If 10% of the electors in the affected area signed the petition Newham would be legally obliged to carry out a review within 12 months. 

Together the existing wards of Forest Gate North and Forest Gate South are home to about 20,000 people, but the area covered by the council need not exactly match those boundaries. However, that makes a sensible starting point for thinking about this.

I think there are exciting possibilities here for local people to re-engage in the governance of our community, but what do you think? Is this an idea worth pursuing? Why not head over to Woodgrange Web and join the debate –


How to parent like the French

7 Feb

Seriously, is there anything they’re not better than us at?


Wanstead Flats in the snow

5 Feb

on Instagram – February 05, 2012 at 11:37AM