There are local authorities who still don’t get the dire state of public finances and these are people who clearly should not be in charge of the petty cash let alone a municipal budget of millions!
Reports that a Lothian council plans to join others by setting aside £1million to pay the deposits of first-time buyers beggars belief. This time we are faced with an ‘East Lothian Question” although on this occasion it is ‘what the hell have they been smoking?’.
At a time of unprecedented belt-tightening, when councils up and down the land are having to make do and mend, when those who have been profligate in the good times are squealing as the pips are pressured it seems incredible that anyone could think that now was just the right time to try and single handedly prop up the housing market. Meals on Wheels or home ownership? Child care and schools verses a leg up for developers and the mortgage industry? Can it really require a diagram? There wasn’t enough money in the good times to do everything we wanted but there is nothing like enough now. These are local authorities who have completely lost touch with reality – local politicians who are literally betting the house on the property market.
One way even local councilors know that the housing market has got too hot is when those at the bottom need more than usual to be able to climb aboard. It is not the job of the local authority to spend council tax money propping up an over-heated housing market. If prices have to fall back so that first time buyers can afford to buy then that is what is what should happen. It’s called Capitalism. As the Governor of the Bank of England said last year at the Mansion House and made reference to in a speech he made in October 2009 to Scottish business organisations in Edinburgh – “It is time to take away the punch bowl”.
East Lothian Council seems to want to stagger down the street clutching a bottle of Tartan Ale looking for trouble and bragging as it goes. As can happen with those who get ‘over-refreshed’, we can expect the next stage to be an unattractive mess that almost certainly they won’t be in any condition clear to up.