by Keith Dovkants
The great Hackney pitch sell-off
These all-too-scarce open spaces are vital lungs in a part of the inner city where light and air are at a premium. They are places that children, especially, need. But Hackney council is about to sacrifice them to the cause of trying to balance its books.
How could it come to this? The answer goes back decades, to the ideological blight of the Loony Left, factional in-fighting and corruption scandals that steadily bled the life out of the borough. Last May the council was taken over for the first time by New Labour. A group of moderates, led by a committed Blairite, Jules Pipe, promised a new beginning. But an Evening Standard investigation shows services have deteriorated still further and the financial position is at crisis point.
All this has happened despite massive sell-offs, a 10 per cent hike in council tax and cuts so severe Hackney is on the brink of failing in its statutory duties.
Nick Raynsford, Local Government Minister, promised last month to give the council £25 million of taxpayers’ money to shore up essential services. But even this – equivalent to almost £130 for every one of the borough’s 192,479 residents – is at risk of sliding into the bottomless pit that has swallowed countless millions.
The word countless is used advisedly. It is to Hackney’s enduring shame that during the past year it has doled out enormous sums without a shred of supporting documentation. Money has simply disappeared, money that was desperately needed. Where did it go?
Auditors did a check on a random sample of 47 individuals being paid from the £200million annual payroll. Employee files could only be found for 12 of the 47. They checked arrangements with outside contractors. On one £8million deal the council’s monitoring team couldn’t find the contract so no one was sure what they were supposed to get for the money.
In the bad old days of the Loony Left, Hackney was known as a soft touch for employees seeking pay-offs. In the past year two members of council staff hit on a way of streamlining this often onerous process. They made themselves redundant.
All over the borough people are feeling the squeeze. Among the worst affected are families with young children, hit hard by the closure and disposal of child and nursery facilities. The latest threat is to concessionary travel for the disabled.
The sale at Claridge’s is part of a mass disposal of assets which the New Labour council boasted would raise a potential £70 million. By November last year only £10million had been realised.
The council sought to reassure a government monitoring team and the auditor by saying further buildings and land it planned to sell this winter would bring in £ 30million. Expert opinion suggests this figure is wildly optimistic-It is believed the promised £70million could amount to no more than £30million, leaving a gaping £40million hole in the asset disposal budget.
Residents’ anxieties over the sale of assets are shared by district auditor Les Kidner. He has cautioned the council against wholesale disposals because it will need properties for future regeneration and ” unidentified future needs”. But the future seems to be the least of the council’s concerns as it pursues a hand-to-mouth existence.
For many Londoners, Hackney has long been thought of as another planet, an alien place best left to fend for itself. But no one can feel insulated from the unfolding tragedy that threatens to engulf it. Other London boroughs are already being asked for an extra £700,000 to make up a shortfall in Hackney’s contribution to the Mayor’s budget.
And it may be only a matter of time before the taxpayer is asked to pay for a rescue operation on an unprecedented scale.
Hackney has a debt of more than £700million that dates back years. It is costing around £30million a year to service and local action groups are about to launch a campaign that will call on the Government to write off the debt. If it can be done for developing countries, they say, it should be done for Hackney.
The Government is unlikely to set a precedent that will have prudent local authorities up and down the country crying foul, but there is a growing belief in Whitehall that the Hackney crisis will only be resolved with yet more handouts from the public purse.
While Hackney’s playgrounds were being selected to go under the hammer, the Labour group was agonising over one of its pet projects, a £600,000 scheme to create a landscape garden outside the town hall in Mare Street.
After months of pressure from opposition councillors and residents, this idea has now been dropped.
He says he needs time to sort out Hackney’s problems, but many residents are unimpressed by what they have seen so far and Mr Pipe’s majority of five may evaporate in this May’s elections.
His popularity took a sharp dive when he personally intervened to halt a sit-in by parents at two popular nursery schools threatened with closure in a round of spending cuts. One parent said: “He gave us to understand that the schools would not be closed and we called off the occupation.” Soon after, both nurseries were shut and offered for sale.
Mr Pipe has given stalwart support to Hackney’s managing director Max Caller, known widely throughout the borough as “Mad Max”. Mr Caller was the former chief executive at Barnet and applied for the Hackney job after reading an advertisement which warned applicants that Hackney had “an absence of coherent political leadership, a disconnection between strategy and operation, poor financial management and a lack of focus on basic services”.
Mr Caller, who earns £150,000 a year, says he is doing his utmost to tackle these problems, although many feel his best is not good enough. When he turned 50 last summer, a group of Hackney residents arrived at the town hall with a birthday card that suggested he take early retirement.
According to town hall lore, he is preoccupied by concerns over his personal security after a number of threats. He has a secure car parking space and an elaborate alarm system at his home that is said to have cost the council £40,000.
In response to the three-year budget strategy provided by Hackney Council last year, central government is to give the local authority £25m to reduce the impact of the cuts. The ‘deal’ still requires £13m worth of cuts and a 10% increase in council tax. Not much of a deal for Hackney residents who will be paying more whilst simultaneously watching their public services disappear.
How to balance the budget – whatever the social cost
After an audit commission report in 1999, huge gaps in the authority’s finances were exposed and central government demand-ed changes to the running of the council. The first step it took was to prevent a single penny from being spent, by serving a Section 114, an inadequate policy which saw waste vehicles sit idol in the depot waiting for repair as rubbish piled up on the streets. The ensuing protests forced the order to be lifted, but only after the council agreed to formulate a three- year budget balancing strategy. The government paid £3.5m to accountants whose task was to go through each department’s finances looking at ways to make savings.
When the strategy was publicly aired in December last year, there was outrage – no area within reach of the council was safe as group after group and service after service faced huge reductions in their finances. Many residents most in need, the young, elderly and those from minority communities, will lose vital facilities.
The budget strategy requires the government to give Hackney £54m over 3 years. However, it has now been made clear the only one year’s worth of extra funding will be offered. Will the future see even worse cuts imposed than those already outlined in the 3 year budget?
Drop the Debt!
The Government may wish to shift all the blame onto Hackney Council but a major part of the problem is the massive debt repayments the Council has to make to the Government – nearly £75 million each year. If it did not have to pay this it would not have to take the short-sighted step of selling off its family silver, in the form of buildings and land. The facilities that occupy these, such as libraries and play-grounds, are under constant threat of disappearing. The District Auditor has warned that property disposal ‘is not a sustainable medium-term strategy’ while, at the same time, asking for ‘clear actions and timescales to show how the gap (in future budgets) is to be addressed’.
Government-encouraged privatisation has also added to Hackney’s debt. The outsourcing of benefits and council tax to the company ITNET cost the borough £38m when the deal went sour. ITNET meanwhile announced a pre-tax profit for the year of £12.5m. Outsourcing of abandoned vehicles collection is intended although £130,000 of the Neighbourhood Renewal Fund is to be used on it until that happens. And privatisation of Waste Management now seems likely to cost more than when it was in the hands of the council.
The Government claims that the £25m is ‘an exceptional offer of support to prevent unacceptable cuts in services’. Yet £13m cuts are totally unacceptable and more will be scheduled for next year. The Government has provided stringent conditions attached to the money. At least £10m must be made available for future years and so is not available for services at all.
Once again the people of Hackney are left dangling on a thread wondering about the future of their community and what next year’s budget will bring.
News from Hackney Not 4 Sale
Hackney Not 4 Sale, Box No. 7, 136-138 Kingsland High Street, London, E8 2NS. Tel: 07950 539 254.
Last night (Wednesday 19th) the Council forced through a motion that their planning decision on the Town Hall Square application can be taken by three people, two people or even one person. The unique combination of incompetence and prejudice that is Mayor Sadeem Siddiqui presided over the pantomime that those who have visited a council meeting will now be familiar with, and the decision was passed that the planning committee can be composed of just the two or three people who had not become ineligible to sit on the committee when others declared an interest in the scheme in the previous meeting. Two of the three are labour group councillors and it is obvious what the decision will be regardless of all the objections, given that this is a politically driven scheme.Alternatively they may allow for the decision to be made by one officer, the Director of Community and Learning.
A vote of no confidence in the mayor was proposed but unfortunately was not passed. Another feature of the meeting was the banning of any debate on the woeful state of street lighting in the borough.
Claims cure questioned – article reprinted from Guardian Society.
As Hackney tops the table of complaints for Housing Benefit delays in the whole country, the Guardian newspaper looks at the link between privatised services and standards of service.
Wednesday October 31, 2001
Privatising services could be the solution to the “error, waste and fraud” that characterises administration of housing benefit, the audit commission claims today. Yet inquiries by the Guardian suggest a clear link between the worst performing benefit services and privatisation.
A report by the commission says long delays in housing benefit payment are causing hardship, anxiety and even the threat of eviction for claimants. It recommends councils consider “outsourcing” benefit administration as part of a package of measures to improve the service.
The report says some councils, particularly in London, are “open to challenge” because they are taking more than 100 days to process new claims. It adds: “Outsourcing, and partnerships with other councils, or with the private sector, are potential solutions.”
However, there are 14 local authority areas in England where new claims took more than 100 days on average to process in the last financial year. In nine of these, benefit was administered by a private contractor rather than the council.
In the capital, the picture is even starker. All eight of the London boroughs which took more than 100 days to pay a new claim last year had contracted out their benefit administration. Of these, Hackney and Lambeth now provide the service in-house, with Newham and Waltham Forest planning to do the same.
Of the 13 London boroughs which contracted out their services last year, the average time to process a new claim was 117 days. Of the 19 remaining boroughs with in-house administration, the average was 52.
Greg Birdseye, director of the audit commission’s project, says: “Local authorities need to focus on how to get their housing benefit service working. There are a range of things they can do, one of which is outsourcing.”
Liz Phelps, social policy officer of the National Association of Citizens Advice Bureaux, was a member of the commission’s advisory group on the report, Housing Benefit Administration. But she queries its conclusions on contracting-out. “Our evidence is that thousands of [our] clients have received a disastrous service from contracted-out housing benefit services,” says Phelps.
Community activists in Hackney are fighting vested interests and a deafening press silence in an attempt to stop the debt-ridden and notoriously corrupt council from destroying the fabric of the borough.
Cuts are also being made in other areas attacks on council workers’ pay and conditions have been intense, with pay cuts of up to £1500/year and cuts in overtime, shift allowances and flexibility.
In the midst of all this, the council is reported to be pushing plans to pave over the Town Hall Square, at a cost of £1m, £600,000 of which is taken from the Neighbourhood Renewal Fund cut straight from the budget of services such as playgrounds, law centres, youth projects, arts and ethnic minority support groups which are of vital benefit to the people of Hackney. The square currently contains trees and flowerbeds and, while in need of some renovation, is hardly the most pressing priority for a council in Hackney’s dire straits.
The campaign against the cuts and sell-offs is gathering pace. Activists began by squatting an empty shop and setting up a spoof estate agent with information on the properties being sold off. This was followed, on 12th October, by an occupation of the offices of Nelson Bakewell, the real estate agent dealing with the sales, calling for them to withdraw all Hackney Council properties from the auction on the 15th. The auction went ahead, but with paranoid-level security and a lively demo outside leafletting passers-by and potential bidders. Inside, the auction was disrupted by local residents complaining at the selling off of services. The disruption focussed on the sale of Atherden Road Nursery, which was closed earlier this year, then occupied and re-opened by protesting parents (Hackney is currently short of around 1,000 nursery places). To end the occupation, the council lied to the parents and said they would keep the nursery open. The next month the council closed it. It was then occupied by people who reopened it as a much needed community centre. They were evicted after 3 months. The council lied in court and said that it would not be sold. When the bidding finally started, the price was pushed up wildly by two campaigners bidding against each other, who were eventually removed when the auctioneers twigged. However, instead of re-starting the bidding, the auctioneers simply accepted the highest genuine bid (considerably higher than the site had been expected to fetch). [not sure if this is true – thre are reports of lower bid being accepted – anyone know for sure?]
Meanwhile, council gardeners and estate cleaners objected to the cuts in wages and jobs by staging a one-day wildcat strike on October 12th, coinciding with the occupation of Nelson Bakewell estate agents. One worker said, ‘People don’t know how much they’re earning or how long they’re going to have a job,’ hardly surprising that morale’s down the tube, then. The same worker said there was a feeling that Hackney council want to run an experiment in having a council with no in-house services. Earlier attempts to split services up into ‘trading units’ running an ‘internal market’ led to the collapse of several departments and many job losses as a result of fragmentation, increased bureaucracy and loss of econommies of scale since those units that were successful got no encouragement it was suspected then that the ‘internal market’ was merely an excuse to increase contracting-out.
The council’s attitude to transparency is shown by the events around the council meeting on 25th September. A special meeting was called to debate cuts to funding for voluntary community groups, after the Regeneration Committee had been unable to debate the cuts because all of its members declared a conflict of interest [at least they declared it. Ed]. The published agenda for the meeting said it would concern rescinding of standing order 40 no mention of cuts and you’d have to be fairly well up on jargon or in the original failed meeting to know what it meant. The meeting was scheduled for 10pm, but was moved to 8.30. After a number of councillors had withdrawn, declaring interests, the council moved directly to a vote with no debate. The entire Labour contingent voted in favour of the motion (i.e. in favour of the cuts which could force some voluntary organisations to close. Other councillors challenged the proceedings, particularly the absnce of a debate, but got nowhere.
Meanwhile, good news that Hackney’s schools are to be handed over to a non-profit making trust when the current PFI contract with Nord Anglia expires next July. Although the new body will include a school governor and two headteachers, there have been complaints that it will contain no classroom teachers.
Contact: Hackney not for Sale! email@example.com 07950 539 254