The latest local authority to discover it has a ‘Millstone of debt’ from risky investments is Camberley in the backyard of Michael Gove’s Surrey Heath patch.

The Lib Dems took over this poisoned chalice from the Tories last May.

The empty House of Fraser building and the shopping centre were bought by the council for a combined total of £113m in 2016. Funding was tight and the purchase, paid for by borrowing, seemed a way of regenerating the town centre and producing an income stream.

Seven years on, with high streets across the UK struggling, compounded by the Covid pandemic, the two sites are thought to be worth £33m – 70% less than the purchase price – while rising interest rates mean the cost of servicing the council’s debts has increased.

The quirks of local authority financing mean properties remain on the council’s balance sheet at their original value – but if they were sold at a loss, the authority would have to set aside enough reserves to cover the gap.

As Britain’s town hall services crumble, the case for reform is overwhelming

Richard Partington www.theguardian.com 

In most of Britain’s towns there are buildings hinting at a more prosperous past. Vast stone public libraries, swimming baths and theatres; all encircling the grand town halls that once controlled them. Many are long shut, converted or owned by someone else. But the symbolism remains – local government used to do stuff.

Today, England’s councils are in the worst crisis since the foundation stones of these municipal palaces were laid.

Birmingham, the largest local authority in Europe, is the tip of the iceberg in its effective bankruptcy. Croydon, Northamptonshire, Slough, Thurrock and Woking have all gone bust. Dozens more are perilously close – from “red wall” Stoke-on-Trent to the blue-blooded Royal Borough of Windsor and Maidenhead.

As the Conservatives hold their annual conference in Manchester this week, the collapse of the English system of local government ought to worry Tory MPs far more than HS2, taxes or the rights of motorists to drive faster than 20mph.

In the backyards of current and former cabinet ministers, in important target seats, and across the country at large, a wave of local austerity is coming.

“I often quote it, and misquote it – but the phrase here is Denis Healey’s ‘the sky is darkening with the wings of chickens coming home to roost’,” says Tony Travers, a professor of local government at the London School of Economics.

“Had the government wanted to go out of its way, back in 2010, to ensure nearly 15 years later that people were absolutely aware of how austerity was being delivered, they couldn’t have gone about it in a better way than this.”

England’s councils are facing a collective multibillion-pound black hole in their finances, up to £3.5bn on one estimate, as the impact from an almost 60% cut in central government funding since 2010 collides with stubbornly high inflation and pressure on services from an ageing population.

The result will be yet deeper cuts to public services, council tax rises and ever higher fees for parking and other council charges. Already since 2010 there have been £15bn worth of public assets flogged to help plug holes in council budgets.

But, where there is anything left to cut, close, privatise or pass into charity hands, get ready for that too. Just ask people in Woking and Kirklees, where plans announced in recent weeks include the closure of swimming pools, care homes, sports facilities, public toilets and community schemes.

For Birmingham the tragedy is most pronounced, as the cradle of modern local government – where Joseph Chamberlain put into action the “Civic Gospel” of improvement that helped define the Victorian age.

As the city’s Liberal mayor, he pioneered the building of municipal swimming pools and schools, and used corporation funds to buy the town’s gas and waterworks.

After Birmingham’s financial implosion, Rishi Sunak sought to pin blame on the council’s Labour leadership. The local party isn’t without fault, to say the least. But context also matters: for every Labour-run authority in dire straits, there is at least another Tory or Liberal Democrat one in a similar predicament.

Michael Gove, who as levelling up secretary is in charge of local government, should know better than most. Surrey Heath borough council, in his constituency, is close to effective bankruptcy, while six of its near-neighbours were on a Moody’s watchlist published earlier this month.

The mess in this leafy London commuter belt should have more Tories worried. The party dominates here in parliamentary elections, but several councils have fallen from its control after racking up vast debts – including Spelthorne, in former chancellor’s Kwasi Kwarteng’s seat, and Windsor and Maidenhead, in Theresa May’s.

The wider economic context matters, too. To offset austerity-era cuts, many councils took on their debts while borrowing was cheap in the period of low interest rates after the 2008 financial crisis. The money went into schemes to generate financial returns to plug gaping budget shortfalls, or into town centre regeneration. Projects meeting both criteria were prized most.

However, they were often on to a losing bet. Town centres have been drained of life in recent years by the rise of online shopping, as well as benefit cuts and sluggish wage growth sapping consumer spending power. The Covid pandemic then turbocharged these trends, leaving any council that had been acting as a buyer of last resort in a deeper mess.

Even for authorities that steered clear of the property market, the cost of providing services has ballooned as Britain grapples with the highest inflation in the G7, while the cost of living crisis leads more households to need their help. Deep divisions in economic prosperity between Britain’s richest and poorest areas also make it a tougher crisis to fix.

Urgent solutions are clearly required. Aiming to plot a way forward, a forthcoming report from the Fabian Society thinktank recommends greater devolution of tax and spending powers to local communities. It’s a tough sell when so many councils are going bust. But it is not without merit.

England is one of the most centralised nations of its size in the developed world, with central government involved in almost every aspect of how councils operate. As much as 95p in every £1 of tax raised goes to the Treasury, which then decides on how best to reallocate money to local areas – often grudgingly.

Greater devolution could help sidestep the postcode lotteries and council bidding wars witnessed with Boris Johnson’s centralised pots of levelling up money, which were often spent on pork barrel schemes in Tory target seats anyway.

However, any increase in local power will require serious efforts to bolster local governance structures to prevent future town hall financial scandals.

The case for reform is overwhelming. Voters will not thank any party, locally or in national government, for the steady demise of the most visible aspects of the public realm: town centres, public buildings, parks, streets and services. It’s about time local government did stuff once again.

The government’s delays in implementing low-carbon building regulations have benefited housebuilders and property developers by billions of pounds over the last eight years, while UK households shoulder the cost of soaring energy bills amid the energy crisis.

Clea Skopeliti www.theguardian.com 

The sector, which is a significant Conservative donor overall, has saved at least £15bn since 2015 by building homes to old standards, without solar panels and batteries, heat pumps and effective insulation, a Guardian investigation recently found.

As a result, many Britons live in new-build homes that, despite having been constructed in the past few years, are far from futureproof. Renters and homeowners tell the Guardian about moving into brand-new properties that run on gas boilers and lack top grade insulation – leaving householders vulnerable to climbing bills and increased retrofitting costs.

‘It’s almost impossible to heat the house to a comfortable temperature’

When Natasha Cox and her family moved into their four-bed detached home in Rossendale, Lancashire, she was disappointed to find that its energy performance certificate (EPC) was B grade – a band below that for her previous home, and far from “low carbon”, despite only having been completed in March 2022. Although the home is well insulated, its B-grade windows mean you can “feel the wind on the back of your neck”, she said.

“When the temperature drops to about 10 degrees or less, the windows are soaking wet, which has ruined blinds, window ledges and walls around the windows,” said Cox, who used to work as a building surveyor. “It’s almost impossible to heat the house to a comfortable temperature.”

Cox said the only nod toward building to “low carbon” specs was an electric vehicle (EV) charging point outside the property. She would love to move away from a reliance on gas and install solar panels and a heat pump to replace their inefficient boiler, but upfront costs have so far kept them out of reach for the family of five.

She said she hoped the government would introduce legislation to ensure new homes are built to green standards: “Someone’s got to do it – housebuilders just want the cheapest thing possible.”

‘The rudimentary heating elements surprised me’

Douglas Jackson, a 45-year-old project manager, recently returned to Preston from Sweden, and moved into a new-build rental apartment block that only opened to tenants last month. So he was puzzled to find that the energy rating was “very poor” for the room heaters and electric heating, and EPC B overall. “It’s billing itself as a high-end apartment block … then to have such rudimentary heating elements surprised me,” he said.

Jackson said that in Sweden, where he had a heat pump, the awareness of building sustainably was “very different” from in the UK.

After Keir Starmer pledged that Labour would build 1.5m homes in five years, Jackson said he hoped that the party’s housebuilding plan would herald a move towards greater sustainability. “If there’s a push to do volume-built housing, it should absolutely be an opportunity to put the right systems in place. “Some costs should go down due to the volume [of building] as well.”

‘Solar panels are a no-brainer’

Yet some other properties are doing things better. When Sam Shaw, 31, and his partner moved into a brand-new three-bed semi-detached in 2021, they got a pleasant surprise: the south side of the property’s roof was kitted out with 3.5kW of solar panels, which had not been in the original plan for the EPC A-grade home.

The panels mean that despite the rise in energy prices since his move-in date, Shaw’s combined electricity and gas payment has remained at £30 monthly, as the household exports and is paid for any excess energy generated to the grid. “Solar panels are a no-brainer – costs have come down so much,” he said. The property is wired to host an EV charger, though one has not yet been installed, and Shaw said he “sees an EV in [their] future”.

But with the home connected to the gas grid, more could be done to make it low-carbon, said Shaw, a sustainable forestry auditor. “If the house had an induction hob and a heat pump we’d be able to generate almost all the power we need with solar, and our bills would be even lower.” The property can get quite warm in the summer, and an air heat pump would mean they could sustainably cool it when needed.

Shaw also said the lack of amenities near their estate encouraged car use. Despite having good bus links into central Bristol, “there are no services within the immediate area – if you need to do a big shop, you end up driving”.

‘It could have been better’

Amid the energy crisis, Luke, a 38-year-old lab technician based in Wolverhampton, was among those feeling frustrated to have to rely on the gas grid. While the insulation is good in his 2020 home, which he shares with his wife and six-month-old child, it has a gas combination boiler, no solar panels and an EPC rating of B.

The house not being low-carbon “is quite frustrating”, he said. “The energy bills compared with the average are quite low – but you just think, it could have been better.”

When Luke bought the house during construction he was surprised it “wasn’t even an option” to get solar panels. More recently, nine months ago, Luke was quoted £5,100 as the cost of installing a heat pump, including government discount, but costs can be much higher. “I don’t think many people will do that,” he said.

For Luke, it was irksome to weigh up lost savings amid the cost of living squeeze. “With the energy crisis as it was, if we had solar panels, we quite frankly would have been laughing,” he said.

“It’s really vital that [new] houses are built to much more modern standards, not just insulation, but heat pumps, not connected to the gas grid at all. It would be crazy to not put those things in.”

“They won’t need to enforce it. Local people are already doing the job for them by dobbing in owners of second-home holiday lets who don’t follow the rules.”

Owners of holiday homes in a Devon town have been warned that they face a £350 fine if paying visitors dispose of domestic rubbish in public litter bins or take it to the dump.

Tom Saunders www.thetimes.co.uk

Property owners in Salcombe, which is the most expensive place in Britain to buy a seaside home, have expressed dismay at a “bin tax” they must pay if they operate a second home as a commercial enterprise.

South Hams council has used a bin-sticker campaign and sent letters to remind owners that they must declare if they are letting their property to holidaymakers.

One second-home owner questioned how the council would know if holidaymakers were breaking the rules.

“It’s absurd. How on earth will they enforce it?” the owner told The Mail on Sunday. “Are council staff going to lurk around litter bins to check the rubbish registration status of someone chucking in a Mars Bar wrapper?

“I’ve owned a place in Salcombe for 20 years and this is the first I’ve heard of it. They just want to wring more money out of people already facing big increases in council tax or business rates.”

Under the Controlled Waste (England and Wales) Regulations 2012 holiday lets are classified as businesses and therefore disallowed from using local council household bin collections.

South Hams’s letter warns owners that they must pay a commercial rate of £350 a year or arrange private collection. It states: “These properties are not permitted to use the domestic service funded by the taxpayer. This includes . . . recycling banks, litter bins and household recycling centres.”

It has placed stickers on bins marked: “No holiday home waste.”

Permanent residents in Salcombe said that the laws were enforceable.

Pete Ford, 32, a shop manager, said: “They won’t need to enforce it. Local people are already doing the job for them by dobbing in owners of second-home holiday lets who don’t follow the rules.

“I know a couple of places where this has happened. Residents spot renters slipping out with bags of rubbish and report it to the council. Next thing, you see a commercial waste bin appears outside the property.

“Of course, Salcombe needs second homes and visitors who rent them. But these places are being run for profit. Owners should pay to have commercial waste collected, like all businesses.”

Mike Wrigley, 61, a boatbuilder, said: “If you run a business you pay into the system. I see some holiday-home visitors heading on to the street with armfuls of rubbish to dump in litter bins. They don’t want it in their car as they head back up the motorway.”

Richard Toomer, the executive director of Tourism Alliance, said that councils should be careful to avoid penalising second-home owners.

“Holidaymakers are hugely important in many local destinations, including South Hams, and they contribute significantly to the local economy and support jobs.

“Additional costs will undoubtedly be passed on to holidaymakers who are already really feeling the pinch of this cost of living crisis.”

South Hams council said: “Commercial waste produced by a short-term holiday let business should not be disposed of via these methods. Each business must have an arrangement in place to remove the waste and recycling from the property.”