Need for action on local economy 

Following comments made by the Leader of the Council in the Ham&High regarding the council’s stance on the local economy, I feel it necessary to highlight my deep concerns at Camden Council’s increasingly complacent attitude to local economic policy-making in the face of lower consumer confidence and the prospect of a deepening recession.

In this week’s Ham&High (p.2) Cllr. Moffitt states: 

“Some councils are rushing out with ten point plans, but these were the ones who had money in Icelandic banks.  We didn’t have money in Icelandic banks, and we are taking time to look at what’s going on and making careful investigations into what is going on in Camden.  Camden is being hit more slowly than other places and I think it is true of central London boroughs generally.”

There are a couple of things wrong with this statement and I will deal with them in turn. 

The most obvious aspect is that ‘ten point plans’ are in fact not, as Cllr. Moffitt contends, limited to councils which had money in Icelandic banks.  Essex County Council, to take just one, has developed a stimulus package and there has been advice from the LGA.  Islington Council has just passed a package of measures, albeit with prompting from the opposition party.  A brief trawl of economic plans of councils up and down the country shows that there is very little connection between recession programmes and Icelandic investment – indeed one needs to ask why there should be, as investment strategy and help to local firms are not intimately connected issues at all.

The Leader alleges that Camden is being hit “more slowly” than elsewhere but provides no evidence to back this up.  I have heard this view expounded by other senior councillors, so I wonder what internal advice is guiding this view.  Local Futures, a respected economic consultancy based in Camden, takes an opposite view in an article in this week’s Local Government Chronicle (another Camden business).

“…with the recession now impacting on a range of sectors – most notably construction, transport, retail, hotels and restaurants, motor manufacturing and metals – the top 20 most vulnerable districts comprise a variety of different types of the economy.  The high exposure of the city of London and Tower Hamlets is due to the large number of jobs in banks and other financial institutions.  In Westminster and Camden this is accompanied by a high number of jobs in hotels, restaurants and retailing.” 

“Areas will be even more at risk where jobs in vulnerable sectors represent a disproportionately high share of the local employment base.  In some parts of the country these sectors represent over 40% of jobs locally, with seaside towns, as well as central London, most at risk.”

The view from the Leadership so far seems to be predicated on a ‘wait and see’ approach rather than one which anticipates the problems caused by a deepening downturn.  Camden should surely seek to help avert a recession rather than deal with the consequences of it.  

Suggestions by Local Futures include:

-          cutting the time taken to pay invoices;

-          working with other agencies to provide temporary financial support

-          reviewing procurement arrangements to support local businesses

-          financial advice with benefits, rebates and council taxes

-          working with energy providers and retailers to support families at risk

-          developing a long-term vision for recovery  

Cllr. Marshall mentioned the possibility of cutting the time to pay invoices to businesses in his report at the council meeting in early November.  I have yet to see any evidence of this happening in Camden.  This should become a reality, rather than an aspiration employed in public debate. 

I also asked the Finance department about how Camden council can pass the 2.5% VAT cut to customers of Camden services such as swimming and leisure, parking meters and building control services. Many other councils made immediate statements on the VAT reduction on 1 December (and before) and took swift action.  There has been no response so far to my questions around this.  Camden should pass on the benefit of this to local people. 

Following significant cuts to advice services in the first year of the Conservative/Lib Dem administration, funding levels for local law centres and CABx are now currently lower than they were when the UK was not approaching recession.  The council should consider stepping up its assistance to the advice sector, especially around debt and tenancy issues.

Camden’s fees and charges regime should be looked at in relation to its economic impact – traders on markets stalls have had a hike in fees this year and permission-to-park notices for builders went up 267%.  Both of these, at the very least, should be revisited in current circumstances.  They were policies made when we were not facing a recession, and there is a compelling case that they should now be dropped.

Camden should look at what measures it can take to support aspects of the local economy, and here I flag up the restaurant trade, pubs and hotels. 

Camden could also follow the lead of other councils in suspending planned road works, and lobbying TfL to do the same, on town centres and high streets like Hampstead, Camden Town, Kentish Town and Kilburn during the Christmas period to ensure that business are not disrupted by works which could easily be undertaken in the New Year.    

Local councillors of all parties are contacted by businesses or sit, as I do, on boards of business associations or Business Improvement Districts and are regularly asked questions about Camden’s response.  The council needs to develop better on policy in this area and Camden should embark on an immediate round of consultations with business groups and advice agencies to develop, in partnership, a coherent response to this before it is too late.

Camden Council, as a large investor, also has a prominent lobbying role in persuading the banks and financial institutions headquartered in the borough to lend.  It would be worth exploring how Camden, and other London authorities, could actively represent local businesses faced with a credit freeze.  Alternatively, it could look at its own position as a lender given the historic levels of reserves.   

Camden has dealt with recessions before – in the 1970s, early 1980s and in 1989-92.  However, departmental restructuring undertaken by the Chief Executive’s Better and Cheaper programme has meant that Camden has now lost almost all of its organisational experience in regeneration, voluntary sector support, the local economy and welfare advice.  Corporate decisions to lose many experienced public servants – some of whom, like Sheila Alcock, were nationally recognised for their expertise – have turned out to be extremely short-sighted and have left the council ill-equipped to come up with solutions for local people.   

I suspect this explains more fully the council’s inertia in this area.

I do hope Camden will respond quickly and effectively with a full suite of measures to help the local economy, it is within its power to do so.  As it stands Camden is lagging behind most other councils in the country.

Cllr. Theo Blackwell

Chair, Resources and Corporate Performance Scrutiny Committee

Labour Opposition Finance Spokesperson