Who is to blame for the city council’s debt mountain?

They called it the ‘credit crunch’, didn’t they? A snappy little soundbite which attempted to explain to the masses that the bubble had finally burst and the Western world’s economy was going to hell in a handcart.

Cue businesses going bump left, right and centre, horrific job losses, a housing market slump and a global financial crisis the like of which hasn’t been seen since the Great Depression of the 1930s.

We can blame big city bankers for playing God all we want and, yes, they played their part.

But the truth is that – for years – individuals, families, groups, businesses and even nations had been living on the never, never: Borrowing, taking out loans and living beyond their means.

Then suddenly it was time to settle up and lots of people, many companies and even some countries simply couldn’t pay their debts.

The pain of the credit crunch has lingered since 2008 and shows no sign of abating.

Every aspect of our lives has been affected as a result of rising unemployment, the collapse of pension funds, the increased cost of living and the sweeping cutbacks in the public sector enforced by a Coalition Government desperate that we deal with our debt and don’t ‘do a Greece’.

Caught up in this financial maelstrom, the NHS, the emergency services and local authorities are battling desperately to deliver vital public services with ever shrinking budgets.

Local authorities like Stoke-on-Trent City Council which a few weeks ago confirmed cuts of £24 million on top of similar, city-wide belt-tightening amounting to savings of £35.6 million the previous year.

The figures involved are truly mind-boggling. I guess once you get past the first £10 million it’s all just numbers, isn’t it?

Unless, of course, those numbers meant you were one of the 300 people to lose their job with the council.

Or you were one of the thousands who suffered as a result of the many cutbacks to services across the board.

Well here we are, less than two months after those savings were announced it seems the city council is suffering a credit crisis all of its own making.

New figures show the authority is owed a staggering £8.6 million.

This debt mountain has accumulated from relatively minor bills which have gone unpaid by thousands of people.

It covers all sorts of services from room hire, skip hire and licensing fees through to commercial rent, market stall rent and even rubbish collection.

Yes, that’s right. The city council, which has been forced to make people redundant and make cutbacks on everything from allotments to swimming pool subsidies should be millions of pounds better off than it actually is.

Now I could understand an organisation the size and scope of a unitary local authority being owed substantial sums of money. Maybe several hundred thousand pounds.

Perhaps even a million.

But £8.6 million in unpaid bills because the council allowed people to use services without settling the bill until a later date is beyond a joke.

One of the key reasons businesses go bump is because of cash-flow problems. In other words, they fail to get what is owed to them quickly enough.

Councils don’t generally go bump – they just share the pain – which is exactly what has happened here in the Potteries.

We are told that new policies have now been introduced to avoid such problems in the future but, in all likelihood, the authority will end up writing-off the bulk of this debt and so questions surely remain.

Questions like: Why was the debt mountain allowed to accumulate in the first place? How come no-one saw this coming? Which officers are at fault, here? Why weren’t there procedures put in place long ago to avoid such a fiasco?

It wasn’t so long ago that the powers-that-be at the city council were considering doing away with the vital role of Lord Mayor to save just tens of thousands of pounds.

Meanwhile, there has – understandably – been much gnashing of teeth over the cost to taxpayers of the Port Vale bail-out which was crucial to the Mother Town of Burslem.

The fact is if the authority had had procedures in place to collect in some of the millions of pounds it was owed this year’s cutbacks would surely not have had to be so harsh, so painful and so wide-ranging in the first place.

Councillor Sarah Hill, cabinet member for finance, says: “It’s now about how we manage it from here on in.”

I beg to differ, Sarah. Just because the horse has bolted doesn’t mean you can’t examine the stable door to find out how it got out in the first place.

Read my Personally Speaking columns every Tuesday in The Sentinel

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