HBC 'will be bankrupt within 2 Years'

steveL · May 15, 2014, 05: PM

Interesting e-mails coming from the Civic. Apparently, the mad housing rush stemming from the scrapping of the local plan is an attempt to forestall HBC going into bankruptcy within 2 years. No idea how true this is as it's the first I've heard of it, but Labour's free-spending habits are being seen as the principle cause. Some officers were apparently left 'exasperated' after the £1m windfall from the Domes was spent within hours rather than being put in the kitty to avoid future catastrophe.

Lucy Lass-Tick · May 15, 2014, 05: PM

I understood that HBC was supposed to be sitting on significant reserves; if so, where's that kitty gone (or is it tied up in long-term investments)?

There's always been the type of kid who gets their pocket money on a Saturday morning and has nothing left by noon ...

DRiddle · May 15, 2014, 05: PM

Aren't there supposed to be reserves of around £25 million?

Although i guess even if there are, the cuts could wipe that out inside two years, especially with the currrent lot in charge.

It wouldn't surprise me if it did go to the wall and we get swallowed us as part of a wider authorities control.

In many respects, if we can't shift the current lot, it could end up being a good thing.

SRMoore · May 15, 2014, 05: PM

Even with the 'savage cuts' imposed by this 'nasty' Tory led government, HBC have had ran an estimated £4m underspend for the past 3-4 years.

Darlington ARE in serious financial difficulty and have been for a while now.

Lucy Lass-Tick · May 15, 2014, 06: PM

Quote from: DRiddle on May 15, 2014, 05: PM

It wouldn't surprise me if it did go to the wall and we get swallowed us as part of a wider authorities control.

In many respects, if we can't shift the current lot, it could end up being a good thing.

Can't see some of the current incumbents as 'new boys in big school', somehow!

for fawkes sake · May 15, 2014, 06: PM

Quote from: SRMoore on May 15, 2014, 05: PM
Even with the 'savage cuts' imposed by this 'nasty' Tory led government, HBC have had ran an estimated £4m underspend for the past 3-4 years.

Darlington ARE in serious financial difficulty and have been for a while now.

You have to be careful when talking about 'underspends' as if they are some sort of real-term savings made; they are not. Underspends are simply when you spend less money than the amount set in the budget. There's nothing to say that the budget itself was realistic or that it took account of the long term financial position. HBC operates on a 3 year projection and I can tell you now that at the end of that current projection is what's topically known as a 'fiscal cliff'.

brassed off monkey · May 16, 2014, 07: AM

2 Years for them to fill their boots then.

Lord Elpus · May 16, 2014, 07: AM

As I see it under past Leadership, Leaders have always been guided and taken advice from senior Finance Officers.

The current Leader seems to believe he has a better grasp of the situation than the professionals. Together with a classic Labour party spending mentality, (borrow today and let someone else pay for it tomorrow) we could well be doomed.

Jamescampbell78 · May 17, 2014, 10: AM

Fawkes Sake - Spot on

The other thing to remember about this is that you don't necessarily have to have no money to be "Bankrupt".

All it takes is something that swallows up the liquidity needed to service the expenditure required to operate and it doesn't matter one bit what other assets HBC have or payments they may be receiving in the future.

Of course if this ever happens a lot of shady relationships may come into play and favours will be granted in return for the cash required.