Councils in Financial Crisis and YOU will pay

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Hello property Nomads hope you are doing well I just wanted to say before we get started with today’s video a massive thank you for continuing to recommend the channel to other people also for subscribing yourself as well but a quick favor if you haven’t already subscribed uh please do subscribe to the channel

Because the the numbers uh it’s growing and it’s all thanks to you so subscribing and recommending so thank you very much for that let’s continue to grow the channel as best as we can so councils oh where do we start with councils um a lot going on and a lot of

Things coming to light at the moment and it’s a big mixture here of this is what happens when you put the public sector in charge of any well seemingly anything to do with any form of financials whatsoever you know we’ve done videos on this channel recently

About council tax in the UK likely going up by double digit figures and a lot of people are throwing their toys out the pr of that myself included because you almost wonder where this cash is coming from how is this Justified given everything that’s gone

On in the last few years and then you get articles like the one we’re just about to look at uh thanks to the BBC that goes into depth some of the numbers that are involved and they are absolutely mindboggling and you know I don’t really know what

Else to say to that I’ll try and keep it as as py as possible but I’m just going to do a screen share and let’s get on to this yet share screen so here we are so basically most UK councils are debt mountains at the moment supposedly UK councils owe a combined

97.8 billion to lenders that’s quite a high number which is the equivalent of around ,400 pound per person and we’ve had major councils effectively file for bankruptcy Birmingham city council I believe not city council was another one as well it seems like some of the other really bad

Councils a thork council woking as well and yeah not’s mentioned in this article what astounds me is again some of the numbers that we’re dealing with so leaders Thor Council apparently reported a black hole as they say of 469 million in 201022 and debts to total in 1.4 billion which is

Astronomical to be honest and that’s just one Council out of many uh in the UK that have got similar similar issues we got a nice little graph here UK councils with the largest average debt per resident and again this is crazy let’s look at woking woking is probably the best example number one

The debt figure for woking per person is about £19,000 so if you live in in and around woking or you come under the jurisdiction of woking uh burrow Council or woking Town Council whatever it’s called then congratulations you are well and truly uh in the proverbial you are up the creek without a

Paddle apparently 38 Council so apparently 10% of councils have have no borrowing at all which is fine which is great that’s what he like to see well run councils the challenge that you get with woking is that the debt that they have it is expected to rise to 2.6

Billion uh they’ve committed to spending 605 million on apparently Victoria Square skyscrapers in his town center and they spent just under 500 million on uh apparently a failed 1,000 home sheerwater Housing Development scheme uh which was got rid of in October of last year in order to combat this extreme debt

That they’re facing they proposing whopping 12 million in cuts for the next financial year and and then you get into this sort of black hole where they’re going to be looking at reducing services and you know things like public toilets with wom P closures you know all of these sorts of

Things now woking B Council woking Council are in a bit of an issue and as the article keeps going down keeps going down uh the BBC you know pointing out that most of these councils a labor run I’m not going to get into the politics of

Whether it’s run by the left or or run by the right uh in this video that’s only that’s the right thing to do but councils have been borrowing way too much uh they’re mismanaging Public Finance to such a large extent it is unbelievable and it seems that because

Of a government report in 2012 about ways for councils to become more self-sufficient what they’ve seemingly done is they’ve reached out to the treasury they have started taking a lot of Finance from the treasure and other sources and they seem to be almost playing with house money when these

These Council run people are then considering themselves all of a sudden property developers and and they’re probably getting into bed with the wrong people and projects are going wrong and you know look we you know you’re property based we’re property based things go wrong in property these these

Things happen but if you are the council your job is to create a property portfolio your job is to run the council now property might be an element of that yes but ultimately you are there to service your constituents to make sure that the the funds that they are using

Are are being used to it’s maximum efficiency uh what’s not happening is is exactly that so they’re playing with house money they’re doing all this borrowing we’ve now got a situation where interest rates have been quite low and now they’re not as low as they were

You know three or four years ago and if councils have then got to refinance that debt you know their interest payments going to increase and once you get into that vicious cycle you this death spiral just keeps going and going and going and you end up in these scenarios where

You’ve got councils that ow a lot of cash and the situation is not going to be any better now the other thing on that is if you look at sometimes at how slow or you know Council seemingly in the dinosaur age it takes a long time for things to get through Council they’re

Not teaming up the right people and you’ve got people that are not necessarily business-minded in charge of councils making investment decisions that are just not benefiting anyone because again then might not be partnering up with the right people or or doing this or doing that and you get

Into a Financial black hole now the point of this is that when they then get into a financial black hole who ultimately ends up suffering well it’s you and me because the councils look at their financial statements and they go oh well this isn’t good uh yeah we’ve

Got quite a big black hole here um right okay yet council tax has got to increase uh yet we’ve got to increase it by a serious amount because we’re just pissing it down the drain uh we’re very sorry about that yeah council tax rise thank you uh parking fees parking

Permits yet let’s increase them as well and all these costs get passed on to you they get passed on to me they get passed on to all of us and this is where I think a lot of people are going to be pushing back in the next couple of

Months when their council tax bills come through with all these proposals because these people shouldn’t be managing councils in this way and you know they’re leading everyone down at a dark dark hole now of course that’s not every single Council uh this article does say that there are about 10% of

Councils that have no borrowing at all so they’ve not put their constituents into a pral proverbial Financial black hole but there’s a lot of councils out there that um you know are putting people into seriously bad um positions and it’s it’s just not healthy at all but this is what happens

When you get the public sector trying to manage Finance it doesn’t really work you need to have that blend of public and private finance and you know if councils want to do joint developments with property developers and you know joint venture and split the profits 50/50 and it’s you

Know they’ve got the land but someone else has got the finance to do it and and they split that way that’s absolutely great that is superb I like that idea I’m sure a lot of developers would like that idea but it’s when you get to the stages where you’ve got these

Counsil dinosaurs that are making these decisions and they might not have any property experience they might not have any investing experience they might not have any financial management experience but yet they’re playing with house money and they’re playing with your council tax funds in order to do these things

And you know that is it’s crazy in itself and I think a lot of this is going to come to uh you know the surface moving forward so you know this might not be applicable in in in every single country around the world but certainly here in

The UK it’s h 2024 is going to be a funny Year anyway but what we’re starting to see is that people were being taken for a ride more than they should be because of the incompetence of others and you know I’m not saying there’s going to be revolution in 2024

But you know the the uh the feces is very very close to the fan if it’s not already hitting it let’s see what happens as I said at the start thank you for sharing property Nomad please do go and subscribe as well if you haven’t already done so thank you very much and

We’ll see you in the next video