{"id":75,"date":"2020-03-28T12:24:48","date_gmt":"2020-03-28T12:24:48","guid":{"rendered":"https:\/\/www.protectthepeople.co.uk\/?p=75"},"modified":"2020-03-28T12:24:48","modified_gmt":"2020-03-28T12:24:48","slug":"cancel-local-authority-debt","status":"publish","type":"post","link":"https:\/\/www.protectthepeople.co.uk\/cancel-local-authority-debt\/","title":{"rendered":"Cancel local authority debt"},"content":{"rendered":"\n
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To provide councils with resources which are desperately needed for this unprecedented crisis, cancel the debt owed to the Public Works Loans Board, writes Martin Wicks.<\/em><\/p>\n\n\n\n

Taking on more debt is\nnot the only way to create spending power. Debt cancellation, for\ninstance the debt owed by local authorities to the Public Works Loans\nBoard (PWLB), would provide a huge increase in spending power because\nthey would no longer have to repay loans or interest charges. Last\nyear local authorities paid around \u00a34.5 billion to the PWLB in loan\nrepayments and interest charges. Overall local authorities have\naround \u00a377 billion in debt held with the PWLB. Such a proposal might\nhave seemed ‘extreme’ before the Covid-19 crisis erupted. However,\n\u00a377 billion is small beer compared to the hundreds of billions in\nthe government’s emergency measures.<\/p>\n\n\n\n

The financial crisis\nof local authorities resulting from a decade of deep cuts is being\nexacerbated by the coronavirus crisis. There is likely to be a\nserious spike in rent and council tax arrears as countless people,\nespecially those with no savings, will be unable to pay all their\nbills, whilst struggling to feed their families. Millions of people\nare losing their jobs or their income if they are stood down, and\nStatutory Sick Pay is too low to sustain them. Around 2 million\npeople do not even qualify for it and the rate has not been raised a\npenny. Whilst the government has promised councils an extra \u00a31.6\nbillion this is nowhere near what is required.<\/p>\n\n\n\n

The Local Government\nAssociation is reporting that the Coronavirus Emergency Bill will\nsuspend all legal entitlements to adult social care needs.<\/p>\n\n\n\n

\u201cEntitlements under\nthe Care Act 2014 will be suspended so councils are not required to\nmeet all adult social care needs and could opt to delay assessments\nto prioritise \u201cthe most urgent and serious\u201d cases, under measures\nin the proposed emergency coronavirus bill.\u201d<\/p>\n\n\n\n

This must be opposed.\nWe know that as a result of 10 years of austerity councils have for a\nlong time only provided support for the most ‘severe’ cases. In\npractice this means many people who need help do not get it. To\nsuspend councils’ statutory responsibility will make a bad situation\neven worse. \n<\/p>\n\n\n\n

Included in the \u00a377\nbillion local authority debt is that held by housing revenue\naccounts. This is the bogus\ndebt<\/a>1<\/sup><\/a><\/sup>\nthat Labour was committed to review in its General Election\nManifesto. Around \u00a326 billion of it is held by the PWLB. This is not\ngenuine borrowing but the result of Treasury ‘creative accounting’.\nCouncil tenants have paid more rent than the historic borrowing costs\nfor past building programmes.2<\/sup><\/a><\/sup>\nCancellation of this debt would mitigate against the impact of the\ncoronavirus economic crisis \u2013 many tenants may find their income\ncollapsing as a result of the close down and be unable to pay their\nrent. Currently council housing departments are only doing emergency\nrepairs work so there will be a very big backlog of work building up.\n<\/p>\n\n\n\n

Debt charges for HRA\ndebt are around \u00a31.25 billion a year for English local authorities.\nDebt cancellation would make this amount of money available to them.\nAll their rent income could be spent on existing homes and for some\nnew building. This extra money would be no substitute for central\ngovernment grant for house building but it would significantly\nimprove their finances. Grant to the level of Labour’s commitment of\n\u00a310 billion a year would be needed for a large scale council house\nbuilding programme. Such a programme would not only be socially\nuseful but would put back to work building workers who have been laid\noff.<\/p>\n\n\n\n

Whilst such radical\naction as debt cancellation might have seemed ‘extreme’, in the\ncurrent situation it is eminently achievable. Indeed it makes more\nsense than increasing borrowing which will guarantee extending\nausterity rather than ending it.<\/p>\n\n\n\n

In 2013 the\ncoalition government broke\nthe link<\/a> between funding and an annual estimate\nof social needs in each locality. It will be necessary to\nre-establish this link and uprate it annually or local government\nservices, other than child and adult care, will disappear. And the\nquality of care for those two will continue to deteriorate.\nCancelling the \u00a377 billion debt would open the way to councils being\nable to stabilise and grow their services in line with social needs.<\/p>\n\n\n\n

Martin Wicks<\/p>\n\n\n\n

Secretary Swindon\nTenants Campaign Group<\/p>\n\n\n\n

1<\/a>Labour\n\tleadership candidate Rebecca Long Bailey has committed to cancelling\n\tthe HRA debt if elected.<\/p>\n\n\n\n

2<\/a>See\n\tThe\n\tCase for Cancelling Council Housing Debt<\/a> by\n\tSwindon Tenants Campaign Group<\/p>\n","protected":false},"excerpt":{"rendered":"

To provide councils with resources which are desperately needed for this unprecedented crisis, cancel the debt owed to the Public Works Loans Board, writes Martin Wicks. Taking on more debt is not the only way to create spending power. Debt cancellation, for instance the debt owed by local authorities to the Public Works Loans Board […]<\/p>\n","protected":false},"author":3,"featured_media":78,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[2],"tags":[],"_links":{"self":[{"href":"https:\/\/www.protectthepeople.co.uk\/wp-json\/wp\/v2\/posts\/75"}],"collection":[{"href":"https:\/\/www.protectthepeople.co.uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.protectthepeople.co.uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.protectthepeople.co.uk\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.protectthepeople.co.uk\/wp-json\/wp\/v2\/comments?post=75"}],"version-history":[{"count":0,"href":"https:\/\/www.protectthepeople.co.uk\/wp-json\/wp\/v2\/posts\/75\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.protectthepeople.co.uk\/wp-json\/wp\/v2\/media\/78"}],"wp:attachment":[{"href":"https:\/\/www.protectthepeople.co.uk\/wp-json\/wp\/v2\/media?parent=75"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.protectthepeople.co.uk\/wp-json\/wp\/v2\/categories?post=75"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.protectthepeople.co.uk\/wp-json\/wp\/v2\/tags?post=75"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}