Tuesday, January 26, 2010
Barnet Council's Icelandic day of reckoning will come
If Barnet Council leader Lynne Hillan really believes that the millions lost in Icelandic banks have "no effect on council tax", as the Barnet Press quoted her as saying, then she is no more fit to oversee the council's finances than previous leader Mike Freer was.
Total losses on the the council's investments with Glitnir and Landsbanki are likely to add up to at least 11.5 million pounds, based on the figures reported by the Press, and if the council didn't need this money why does Hillan think it was collected from Barnet's council taxpayers?
It may well be that Barnet can still stave off an increase in council tax for the coming year, at a time when the Conservative administration wants to impress voters ahead of the May 6th local elections, but the day of reckoning will surely come in the near future.
Once the final losses are established on the 27 million pounds that Barnet foolishly handed over to the Icelandic banks, the council will have to start rebuilding its finances and my prediction is that there will be a sizeable increase in council tax in the next year or two to restore the contingency reserves.
And if Barnet council really didn't need the money, why has it brought in the "easyCouncil" Future Shape strategy and launched a programme of swingeing cuts? For example, that 11.5 million pounds could have paid for wardens to remain at sheltered housing sites for donkeys' years and saved the council from its costly planned appeal against the court order banning its cold-hearted plan to scale down the warden scheme.