Whether it’s councils dabbling disastrously in derivatives back in the 1980s, or depositing hundreds of millions in Icelandic banks just before the 2008 crash, stories about UK local government and finance rarely have happy endings.
There is generally the same sombre conclusion: that bungling local authorities can’t be trusted with taxpayers’ hard earned cash.
That’s certainly the moral that seems to leap out from the effective bankruptcy of the London borough of Croydon, which this month admitted it could not set a balanced budget as it is legally required to do.
Croydon is one of a number of English councils that piled into the latest local government craze: snapping up commercial assets using cheap government-subsidised debt that was provided with almost no questions asked by an official body, the Public Works Loans Board. Much of this went on property. Local authorities spent £6.6bn on real estate between 2016-19, according to the UK’s National Audit…