Several months ago, Adam Tooze warned that ‘the huge public debt commitments that are being made now will, no doubt, serve fiscal conservatives as a cross on which to nail progressive politics from here until kingdom come’.
This certainly seems to have begun. Despite promises by the central government to do ‘whatever necessary’ to support local authorities, in the last week, as councils have raised the alarm of impending bankruptcies and inadequate support, Robert Jenrick, Sec of Housing, Communities and Local Government, has chosen to blame their investment decisions – as if there are any investment portfolios performing well in the current environment.
“There are some councils that have very significant exposure to commercial investments,” Jenrick told the committee. “Some that are perfectly understandable and some that were perhaps unwise investments to have made in the first place. I have long argued against councils establishing very large commercial portfolios, for example.”
The tragic irony is that many local authorities resorted balancing the books with ever greater reliance on commercial investment in response to budget cuts under austerity (cutting an average of about 2/3 off council’s government grants). Now that those investments are reflecting the current economic shut down and short term injections are needed, no doubt the Conservatives will push for what they have been pursuing for the past decade: selling off public assets, no matter how profitable and especially on the cheap.