Local government is probably the part of the public sector which has been hardest hit by government austerity.

Budgets have been slashed far beyond those in services such as schools and the NHS, leaving council-run services like social care in an extremely precarious position.

In recent years, we have seen a number of councils issuing Section 114 notices - which essentially declares the council bankrupt. This means the council is unable to authorise new spending and has led to central government taking over and slashing any services beyond the statutory minimum. This is punitive to the most vulnerable and leaves residents to pick up the tab - Croydon, which issued a Section 114 notice earlier this year, has been authorised to raise its council tax by an enormous 15%.

Ham & High: Cllr Pippa Connor says that local government has been hit hard by government austerity (Image: Haringey Council)Cllr Pippa Connor says that local government has been hit hard by government austerity (Image: Haringey Council) (Image: Haringey Council)

These consequences would be unthinkable for Haringey residents, many of whom are barely getting by, or only managing due to the support the council is able to provide. As chair of Haringey’s budget scrutiny committee I am therefore worried that in this uncertain world of rising interest rates and given these possible ramifications, we need to ask ourselves: is now the right time to increase our borrowing?

Haringey is currently entering into an unprecedented level of borrowing, even as interest rates rise and market conditions become less favourable. The scale of the borrowing itself is a relatively minor issue, but the interest payments have the potential to cripple Haringey. The interest we paid rose from £3 million in 2018/19 to £13 million this year, and is forecast to continue to rise to £38 million by 2027/28. To put these figures in some sort of context, a 1% increase in council tax increases the council’s budget by just over £1 million.

With some exceptions, most notably the council’s multi-million pound plan to build itself new offices, I would struggle to argue against most of the projects we are borrowing for in isolation - after all, who is against giving a school a new roof or building homes for the least well-off people in the borough? But in totality, these projects create a worrying picture of a council borrowing far too much money. After all, if we are forced to issue a Section 114 notice, these worthy projects will not go ahead and we will be forced to make drastic cutbacks in other areas too.

It is clear that the council is hoping that the Conservative government is swept out of power and that whoever replaces them will give councils a fairer funding settlement. I share that hope, but we cannot risk taxpayers’ money on a wing and a prayer.

Haringey needs to create a robust plan to deal with its spiralling interest payments, and if it is unable, we will need to review which projects are most important and which are not possible to undertake at this time.

Cllr Pippa Connor is Liberal Democrat councillor for Muswell Hill ward and the chair of the budget scrutiny committee for Haringey Council