Council debt cut pledge on track as new debtometer launched

Monday September 12, 2011

Debtometer at September 12, 2011 (see a higher resolution image in a new window)

Millions of pounds are being freed up for vital frontline services as the council looks set to hit its target of halving its historic debt mountain by 2014.

Hammersmith & Fulham (H&F) Council’s debt reduction strategy, which includes moves to sell under-used council buildings, is set to wipe another £12million off the town hall’s debt burden by April 2012.

The news comes as the council launches a new quarterly online ‘debtometer’ so that residents can keep a track of the progress made in reducing municipal debt.

The amount owed by the authority has been falling steadily since its peak in 2004 when the council owed an eye-watering £176million – costing £9.5million a year in interest repayments.

Since then, the authority has worked hard with a range of efficiency measures to cut its debt to £122million at the start of the current financial year (2011/12) – but that still drains around £4.3million in annual interest payments before a penny is spent on services for the public.

Today the council announced that it expects to wipe another £12million off its longstanding debt by the end of this financial year and says it is ‘on track’ to halve its historic debt by April 2014.

Cllr Stephen Greenhalgh, H&F Council Leader, says: “Nationally and locally we have seen the dangers of excessive debt and we are the only council in the country that is consistently cutting council tax and lowering the council's debt!

“Spending millions of pounds on costly interest repayments to the banks just to stand still is economic madness and is a ticking time bomb if interest rates rise – as they must do at some stage.

“Therefore our strategy for the past five years has been to reduce the council’s historic debt so that taxpayers’ cash, which had been spent servicing interest costs, can be redirected to protect frontline services like caring for the vulnerable, child protection, street cleaning, more Police, schools and parks. Only by cutting debt can we secure the strong financial future that the borough deserves and this year’s progress means we are on track.”

Like councils across the country, H&F Council is under serious financial pressures as a result of the national debt crisis and the council has tightened its belt by shedding around 1,500 jobs since 2006 and is also selling underused buildings and combining services like libraries and children’s services with Westminster and K&C.

“In H&F we are proud of the services we deliver while reducing council tax,” continues Cllr Greenhalgh. “Our services are judged to be amongst the best in Britain, while last year we recognised as the best local authority in Britain. But with our debt burden, we are achieving this with one hand tied behind our back.

“The council has been shrinking for some time and we no longer need the vast swathes of office space we once had. Our focus will be on using the buildings we own in the most efficient way possible. If a building is underused and can be sold to reduce our credit card bill it will be sold. The days of having a council building on every street are over – our residents want quality services, not bricks and mortar which are often underused.”

To view the council debtometer click on www.lbhf.gov.uk/councildebt.