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Perhaps His Spudness would care to explain this?

The report on Slough Borough Council is gorgeous.

Although Slough initially reported a £100m “black hole” in its budgets at the time of its Section 114 bankruptcy notification in July 2021, this ballooned to £480m as auditors went through the books. It also owes £680m borrowed in recent years to finance a series of property developments.

Full report here.

The current year’s budget was only lawfully set by allowing SBC to capitalise revenue
expenditure of some £84m, in part to rectify past balance sheet errors and in part to allow
services to continue to be operated at some level to comply with statutory requirements.

They borrowed a fortune – as Spud says government should do – to invest in projects – as Spud says government should do – then lost it. Which is the problem with government investing, they’re no good at it.

But His Spudness Abounds insists that this is the future for the country – government should borrow more to piss it up against the wall. Aren’t we the lucky ones?

23 thoughts on “Perhaps His Spudness would care to explain this?”

  1. They couldn’t even get their hands on Lady Porter, they’re never going to bang up anybody from Sluff Town Council.

  2. What happens though ? A council goes bankrupt – does it lay everybody off and stops collecting the bins ? Or does the general taxpayer pick up the tab and it continues on its merry way ?

  3. No, remarkably, it doesn’t. It’s the other way around. If a bank is illiquid and needs cash then the BoE will lend against “good” security. And if the bank doesn’t have enough of that then it’s bust and is closed down.

  4. That can’t be right! The bank courageously lends more, so creating more money, it can never go bust! I know it’s twuu, my economics lekchurer told me so, and I’m just waiting for Northern Rock to restart paying dividends. It’ll happen any day soon.

  5. Were mortgage backed securities good in 2008, according to the market?

    Don’t British banks use collateral transformation to turn junk into something the BoE can call good?

    Has Bagehot’s dictum now “lend freely, at negative interest, against whatever”, and why not apply it to public financing?

    In short, why turn a blind eye when business gets backstopped by the Bank, but get all piously self-righteous when it comes to government?

  6. Well, duh, why would the government borrow money to fund all that lovely governmenty stuff when they can just print it? Indeed, why not solve all debt problems by just paying them off with fresh money? Action this day.

  7. Come friendly bombs and fall on Slough!
    It isn’t fit for humans now,
    There isn’t grass to graze a cow.
    Swarm over, Death!
    Come, bombs and blow to smithereens
    Those air -conditioned, bright canteens,
    Tinned fruit, tinned meat, tinned milk, tinned beans,
    Tinned minds, tinned breath.

    Mess up the mess they call a town-
    A house for ninety-seven down
    And once a week a half a crown
    For twenty years.

    And get that man with double chin
    Who’ll always cheat and always win,
    Who washes his repulsive skin
    In women’s tears:

    And smash his desk of polished oak
    And smash his hands so used to stroke
    And stop his boring dirty joke
    And make him yell.

    But spare the bald young clerks who add
    The profits of the stinking cad;
    It’s not their fault that they are mad,
    They’ve tasted Hell.

    It’s not their fault they do not know
    The birdsong from the radio,
    It’s not their fault they often go
    To Maidenhead

    And talk of sport and makes of cars
    In various bogus-Tudor bars
    And daren’t look up and see the stars
    But belch instead.

    In labour-saving homes, with care
    Their wives frizz out peroxide hair
    And dry it in synthetic air
    And paint their nails.

    Come, friendly bombs and fall on Slough
    To get it ready for the plough.
    The cabbages are coming now;
    The earth exhales.

    … or so wrote John Betjeman. Someone needs to add some verses about the place being overrun by immigrants, councillors with snouts in the trough – and bad investments.

  8. Councils all over the country have spaffed billions on commercial property while claiming right to buy and Thatcher robbed them of social housing. Fucking morons.

    In my home town the twunts are still building a city centre shopping mall even though there’s street shops boarded up all over.

  9. Amazing, an almost completely ‘diverse’ council…

    Isn’t Sluff 95% diverse anyway? South-Asia-on-Thames

  10. Rsm/ dbc reed/ Arnald/ Newmania

    Were mortgage backed securities good in 2008, according to the market?
    They were considered good as most people didn’t understand to them. What that has to do with the article in question is anyone’s guess. Try using MBS as collateral now….

    Don’t British banks use collateral transformation to turn junk into something the BoE can call good?
    They have been known to. Is that what Slough council is doing however?

    Has Bagehot’s dictum now “lend freely, at negative interest, against whatever”, and why not apply it to public financing?
    Are you saying that the Bagehot dictum has been transformed into something that reads like a Richard Murphy quote? And that it should be applied to public sector financing

    In short, why turn a blind eye when business gets backstopped by the Bank, but get all piously self-righteous when it comes to government?
    I’d have let some of the banks go to the wall in 2008 – that’s one of the causal factors behind the current crisis. Tim is big enough to offer his own justification but he is merely pointing out that Slough Borough council borrowed as Murphy suggests they should and now the taxpayer is picking up the tab. I’d imagine he’d be just as exercised if it were a private body being backstopped…

    I’m curious – you seem to dislike the ‘thrust’ of the posts here. What drew you to this blog in the first place?

  11. Anyone know Spud’s middle name?
    (Although it can’t actually be him. He’d find capital letters irresistable. Most likely in bold if he could get his head around html)

  12. Wikipedia (so it must be correct) has the population of Slough as ~160,000 – but I’m not clear whether that’s the town or borough. Do they really need 42 councillors? My city, population ~210,000, makes do with eight councillors and a mayor. The neighbouring city (Vancouver) has ten councillors and a mayor for a population of ~660,000. Slough seems seriously (and disastrously) over-governed.

  13. The middle name of the potato is James

    A perfectly decent Scottish name in my view. It does rather amuse that over the years he has created at least 6 identities I can see on Companies House data, and yet he criticises people on his blog for having multiple identities and also criticises Companies House officials for not doing enough checkings.

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