A Better Deal for Newham’s Taxpayers

Newham Green Party are thrilled to see action following our 2 year campaign against Newham’s LOBO loans

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We are thrilled by Newham Council’s announcement that Barclays are turning 55% of its Lender Option Borrower Option, or LOBO, loans (worth £248 million) into a normal fixed-rate loan. It is estimated that this deal will save Newham Council £1.6 million this coming year!

The move follows years of campaigning by our team, alongside Debt Resistance UK and members of the public who uncovered the toxic debt, totaling 90% of the council’s debt portfolio. The interest payments alone equal 80% of Council tax paid from 2014 to 2015.

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Debt Resistance UK’s profile of Newham

We are excited to finally see positive movement on this issue. This should rescue us from over a million pounds of cuts to local services and jobs this year. Newham taxpayers’ deserve to see their money spent on local services, not bank debts from mis-sold financial products.

However, we are concerned that the other 45% of the council’s LOBO loans remain unchallenged, and that full details of this new deal with Barclays have not been released. We can’t be sure that this announcement isn’t just a rewording of last year’s changes initiated by Barclays for all of their LOBOs contracts in the UK.

Rachel Collinson, Membership Officer of Newham Green Party, and Elisabeth Whitebread, the Green Party candidate in the 2016 Forest Gate North by-election, have worked closely with Debt Resistance UK since investigations started in 2014.

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Speaking on behalf of Newham Green Party, Rachel Collinson said “This is a brilliant first step to reduce Newham’s debt problems. However, we will continue to campaign for further action to reduce debt expenditure from the LOBO investments with RBS.
Residents, local businesses and Council workers should not be penalised for these banks mis-selling loans to councils.”

Newham Green Party’s campaign started in 2014, following discussions with Joel Benjamin of Debt Resistance about investigating Newham’s LOBO loans.
In 2015 Ms Collinson submitted letters to Newham Council regarding the LOBO loan debt, with little in the way of constructive response. This was followed with a request to the auditors to take the Council to court over illegal spending.
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In 2016 Green Party and Debt Resistance activists attended various Council meetings; providing investigation reports, and offers of no win, no fee legal advice to provide the council with a low cost solution.

In addition to the nearly 900 people who signed our petition, we would like to thank all our volunteers, members and supporters, and Newham Councillors Rokhsana Fiaz, John Gray and John Whitworth for their input and questions at some of the Council and audit meetings – often against strong resistance from other Newham Councillors.

In an email to their supporters, Ludovica Rogers of Debt Resistance UK said:

We hope this deal goes beyond a simple PR stunt for Barclays and Newham council and that risk and high costs for taxpayers associated with LOBO loans are being effectively removed. Until Newham Council put the terms of this deal negotiated in secret into the public realm, we can’t comment, in particular on loan breakage costs, interest rates and loan restructuring fees.

Debt Resistance UK would like to thank the hundreds of Newham residents who have signed the LOBOs petition and kept up public pressure on Robin Wales administration, alongside efforts of Newham LOBO loan objector Rachel Collinson

They join us in our disappointment at the poor conduct of Finance Director Lester Hudson and Mayor Robin Wales – “whose financial competence must now be called into direct question.”

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Cllr Hudson speaks at Council Meeting, July 2016. Photo by Debt Resistance UK

We will continue to work with the brilliant Debt Resistance UK team on monitoring the council’s new deal and how the savings are put to use.

Please get in touch if you’d like to join this campaign, and sign the petition to continue the pressure on the remaining RBS loans.

Leader Knows Best

R-CollinsonSmlNewham Green Party Chair, Rachel Collinson, reports back from Newham Council’s August meeting of the Overview and Scrutiny Committee to follow up on concerns around recent council budget decisions.

“I know how this vote is going to go. If the motion was ‘the earth is flat’ councillors Rokhsana, Seyi, Kay and Susan would vote 4-2 for it,” thunders Lester Hudson, as he eyes the Overview and Scrutiny Committee meeting.
 
I’m so offended and shocked by this that I can’t help snorting, despite being in the public gallery.

Hudson continues as though nothing has happened. “If the motion was ‘Geoffrey Boycott is useless at cricket’ they would vote 4-2 for it.” Nobody’s laughing this time. His tirade continues: “I sincerely hope this time, common sense will prevail, but I doubt it.”

There is general uproar, and the female councillors who have been the subject of these personal attacks are rightly livid. (Later on I realise that John Gray – also a member of the rebellion against the Robin Wales regime – is spared the vitriol. Could it be that the Y chromosome is a safeguard?)NewhamLogo

A chap to my left passes me a sheet of lined A4 notepaper, with “Attendance Sheet” scrawled at the top. There is a name and one signature on it so far. I pass it on without signing.

A few minutes later, an unnamed lady shouts “Has everybody signed the attendance sheet?”

“I’ve never been asked this before as a member of the public in a council meeting,” I say, annoyed. “It doesn’t say on it how the data will be used, so I didn’t.”

“I just need to know who is here,” she replies.

Well, that much is obvious.

This meeting has been called because Newham Council’s Cabinet have seemingly approved a dubious investment proposal without oversight of the Investment and Accounts Committee. Councillors heard about it in passing and were horrified. They have decided to ask the Mayor to reconsider spending £500,000 without due process.

Council Officers will not let members of the public (or even certain councillors) see more details of what’s proposed. All we know so far is that the Cabinet are attempting to reduce payments to the council’s pension fund – which already has a £238 million deficit – using a ‘Special Purpose Vehicle’. We understand that the council is using some of their buildings as security on a risky investment. How do we know it’s risky? Because their financial advisors are warning them against it.

It seems common sense to me that if the proposal were common sense, then the Cabinet would not resort to bending the rules to avoid scrutiny.

What I am seeing in action here is the Labour belief that Leader Knows Best, and democracy is merely a frustrating blot on the master plan. The belief that the people ought to shut up and take their medicine. The belief that is shown up at its worst in the Executive Mayoral system.

This is further confirmed when a member of the public stands up and questions whether the chair should be asking loaded questions of his own committee. The offender, Anthony McAlmont, says that members of the public are not allowed to speak, despite having allowed an earlier question. For some reason this breach of meeting protocol goes unnoticed by the Legal advisor present.

Newham Town Hall in East HamI hear the words ‘p&%$-up’ and ‘brewery’ emanate loudly from elsewhere in the public gallery.

With dogged persistence, the female Councillors draft a resolution that no more money should be spent until the investment and accounts committee has had a chance to review the proposal in more detail. In the end, the meeting vote is 5-1 for this motion.

Hudson warns this is a waste of time. What does he know that we don’t?

During this fiasco, I am reminded of the botched Labour leadership elections. You can vote for anything, as long as it’s the right choice.

As if to reinforce this, the Mayor rejects the motion day after.

It would be easy to despair right now. But I’m seeing a new movement emerging amongst the people of Newham. I see it in the snowballing, hopeful tweets about Jeremy Corbyn. I see it in the growing bravery of left-wing councillors against their bullying leaders. I see it in the swelling numbers of Newham Green Party.

And it’s almost reassuring to observe some councillors in utter denial of this growing trend. It means we will win, and soon.

If you’re interested in helping the Green Party challenge Labour’s one party state in Newham, do sign up here. (NB: We have a No Purge Promise™)

 

This post originally appeared as a guest post on ForestGate.net on August 27th 2015.