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The credit crunch is the biggest challenge facing the UK and local government today. There are no easy answers, and councils are not going to be exempt from the impact of what is happening globally. Decisive and strong leadership is needed at all levels of government. For a start, UK interest rates need to be significantly reduced. Not by quarter per cents, but much more radically. I hope by the time you are reading this, the Bank of England has realised that inflationary worries, while important, are the much lesser problem here. When global organisations with balance sheets which looked very healthy 12 months ago start to go under, then the problem is bigger than anything we have faced for years. Local councils need to support their residents in a responsible way. If possible, do the radical, and cut taxes and fees to stimulate demand – but be clear to their residents that this is a short-term help measure. Look more thoroughly than ever at your costs. Residents will not thank their local council for advertising for a head of staff wellbeing, with yoga experience essential, when they are struggling to pay their fuel bills and buy the kids clothes. Of course, there are some really important behind-the-scenes roles, but now is not the time to recruit nice-to-have, non-essential posts. Do exceptional and new things if you can, but don't be foolish enough to simply delay the problem. If the council is not in strong financial health, it will come back to haunt you before you know it. Residents will want to know what is being done to help them, but won't thank you if you store up bigger problems for future years. Councils have the elected primary role in leading their boroughs, and that is exactly what any good council will do. Richard Ennis is director of finance at Ealing LBC

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FINANCE

Money Matters

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