Connect with us

Published

on

Sky News analysis has found that two Surrey councils spend more on interest and paying back loans than they do on services, like transport and social care.

Neighbouring borough councils Spelthorne and Runnymede have said they have had to make investments in response to government cuts.

Both councils’ investment has mainly been in commercial property, which they rent out for a profit.

In 2021/22, Spelthorne spent £36 million on financing debt, almost 60% more than the £22.8 million they spent on services.

Runnymede also spent nearly 50% more on debt than on services, spending £17 million on debt and £11.5 million on services.

Eastleigh, Basildon and North East Derbyshire all spent more than half of the amount they spend on services on repaying debt and interest.

Use our tool to see what your council spends on debt compared to what it spends on services, and how that’s changed in recent years.

Both Spelthorne and Runnymede suggest that there is no issue with their investments, however, as they’re making big returns.

A Spelthorne Borough Council spokesperson said: “The income that the portfolio generates each year far outweighs the debt and therefore the financing is not a burden, and in fact without this income, crucial service provision that support residents would be directly and adversely affected.

“[…] We acquired these investment assets acquisitions in 2016- 2018 as part of a Capital Strategy to generate sufficient long-term income to offset the impact of the disappearance of government grants.”

A Runnymede Borough Council spokesman said: “The Council made a strategic decision several years ago to borrow money from HM Treasury to invest in commercial property which we rent out.

“This was done to replace cuts in government funding which all local authorities suffered. We’ve used this income to pay for substantial regeneration in our towns, bringing fantastic facilities to the Borough, generating footfall for local businesses, creating new jobs, and revitalising town centres.

“The debts we hold are well managed and do not affect the way core Council services are provided.”

The cuts in government funding mentioned by both have affected other councils across England.

This includes the Revenue Support Grant, a central government grant given to local authorities which can be used to finance revenue expenditure on any service.

Needs-based central government grants like this used to be the largest source of revenue for councils.

But after more than a decade of austerity and changes in government funding, they rely far more on council tax and retained business rates levied on residential and commercial properties in their area.

Across England, the amount of Revenue Support Grant given to councils overall has decreased by 90% between 2013/14 to 2021/2022.

Previous Sky News analysis has shown deprived areas experienced the biggest reductions in spending power.

Big investment can go wrong for councils

Other councils have made big investments like Spelthorne and Runnymede in response to government cuts, but with less success.

Iain Murray, Director of Public Financial Management at the Chartered Institute of Public Finance and Accountancy (CIPFA) says councils need to consider the risks associated with big investments.

“They need to make decisions based on not just the here and now but model scenarios. A lot of these decisions were made in an environment where inflation was low and fairly static and stable,” he told Sky News.

“Since the last 12 months, we’re now in a completely different economic situation.”

In situations where things may have gone wrong, “it may be that there’s just not been enough forethought about some of the potential what ifs”.

Another Surrey council, Woking Borough Council, is one of several in England dealing with big debt problems.

The council said it was in the territory of issuing a Section 114 notice – which means the government has to intervene to ensure local services are sustainable.

Other councils face similar problems. Slough, Croydon and Thurrock – which has a £500m deficit caused by a series of disastrous investments in risky commercial projects – all issued Section 114 notices last year.

Woking had debts amounting to around £2bn.

Like other councils in England, Woking’s funding structure has changed significantly in the past decade.

Woking shared their sources of revenue with us for the 2011/12 and 2023/24 year.

The amount the council will receive in government funding for 2023/24 is 10% lower than it was in 2011/12, from £5.2 million to £4.7 million.

The amount of Revenue Support Grant it receives has decreased by 92% over the same period, while council tax receipts have risen by nearly 40%, from £8.3 million to £11.4 million.

Councils are running down their unallocated reserves

The reduction in government funding also means that some councils are running down their unallocated reserves.

Unallocated reserves are held so councils can continue to deliver local services when unexpected situations arise.

North Tyneside’s unallocated reserves have decreased by 90% from 2016/17 to 2021/22. They’re left with £690,000, equivalent to less than £3.50 per resident.

Unallocated reserves in Newark & Sherwood, in Nottinghamshire, Uttlesford, in Essex, and South Norfolk have also decreased by more than 80%.

Cllr James Jamieson, Chairman of the Local Government Association, said: “Over the past decade, councils have already done more than their fair share of the heavy lifting when it comes to putting public finances on a more sustainable footing.

“Many councils are still grappling with significant challenges when setting their budgets and trying to protect services from cutbacks due to the deep underlying and existing pressures they face.

“[…] Councils want to work with government on a long-term funding plan which ensures they have adequate resources, certainty and freedoms and can deliver local services for our communities.”

Does this mean councils will go bankrupt?

It’s not possible for a council to go bankrupt in the same way as an individual or a business, but what it can do is issue a Section 114 notice, which is effectively the same thing.

This Section 114 notice triggers a form of action which blocks any new spending and gives the council 21 days to meet and decide what to do next – typically setting a new budget reducing spending on services.

Funding for services like safeguarding vulnerable people are protected, existing financial commitments and contracts will be honoured, as well as ongoing payment of council staff.

On it’s own, councils spending large amounts on financing their debts and running down their reserves does not mean they’re at risk of issuing 114 notices, or financial disaster.

However, spending on debt and the amount reserves councils are getting through are indicators that CIPFA has identified that make councils less financially resilient.

Other identifiers of financial reliance are harder to measure.

For example, CIPFA suggests councils should have sound financial management and good governance.

Financial plans should be made in the medium term, rather than just trying to get from budget to budget in the way that struggling households might make money stretch to last from month to month.

This is harder for councils because the amount of funding they receive from central government is only set at the end of each financial year.

We noticed that several councils, like Thurrock and West Northamptonshire, weren’t able to report their accounts on time. West Northamptonshire, in particular, wasn’t able to submit some of its accounts despite receiving an extension.


The Data and Forensics team is a multi-skilled unit dedicated to providing transparent journalism from Sky News. We gather, analyse and visualise data to tell data-driven stories. We combine traditional reporting skills with advanced analysis of satellite images, social media and other open source information. Through multimedia storytelling we aim to better explain the world while also showing how our journalism is done.

Why data journalism matters to Sky News

Continue Reading

UK

How Air India crash victim’s grieving family discovered remains mix-up

Published

on

By

How Air India crash victim's grieving family discovered remains mix-up

Almost two months after Air India Flight 171’s deadly crash, some of the 53 British nationals on board are only now being laid to rest.

Some 300 friends, families, and locals from the Gujarati community in and around London gathered in Wembley for a prayer and memorial service dedicated to remembering some of the victims.

Wearing his father’s emerald ring that was miraculously recovered from the wreckage, Miten Patel addresses the crowd.

Miten Patel, whose parents Ashok and Shobhana Patel died in the Air India plane crash, reading a eulogy
Ashok Patel's ring, recovered from the Air India flight, being worn by Miten Patel

His parents, Ashok and Shobhana Patel, were travelling back to their home in Orpington, Kent, after a spiritual trip to India, when they were killed in the crash on 12 June.

Their funeral was held only days ago, after being delayed following the discovery that the remains of other individuals were found in Miten’s mother’s casket.

A photo of Ashok and Shobhana Patel, who died in the Air India plane crash, on display at a vigil
Image:
Ashok and Shobhana Patel were among 241 who died in the Air India plane crash

He credits Professor Fiona Wilcox, the senior coroner at Inner West London Coroner’s Court, for meeting with him and his family to break the news.

“My parents were the first ones repatriated in the UK,” Miten explains – he organised the repatriation of his parents before he flew out to Ahmedabad.

“When they were back home, the first thing that they did was a CT scan. And that’s when it came about, the CT scan showed that with mum’s remains, there were further remains there too.

“I don’t know what they were. I don’t know how many.”

Miten Patel, whose parents Ashok and Shobhana Patel died in the Air India plane crash
Image:
The remains of other individuals were found in Miten’s mother’s casket

Miten’s parents’ funeral was attended by hundreds. His father, Ashok, was a financial adviser and his mother, Shobhana, was a retired microbiologist.

As the eldest son, organising much of his parents’ farewell fell to him. The concern around his mother’s remains delayed the family’s chance to grieve.

“I think there should be a level of responsibility taken. Why did that happen? Where was the flaw in that process? I mean I do understand that whole situation, people were rushing, people were very tired.

“You know, to get all the remains, then having to separate them by DNA, it’s a long process. But really, for us as loved ones, it is very upsetting.”

Indian government spokesman Randhir Jaiswal previously said the country was “working closely with the UK side from the moment these concerns and issues were brought to our attention”.

“In the wake of the tragic crash, the concerned authorities had carried out identification of victims as per established protocols and technical requirements,” he said. “All mortal remains were handled with utmost professionalism and with due regard for the dignity of the deceased.

“We are continuing to work with the UK authorities on addressing any concerns related to this issue.”

The flight crashed moments after take-off en route to Gatwick, killing 241 people on board. Horrifying images were beamed around the world within minutes.

Confusion and fear spread like wildfire among relatives back in the UK, who immediately tried to get hold of their loved ones.

Read more:
Plane suffered ‘no mechanical fault’ before crash – chief executive
Anger growing as Air India families wait for relatives’ remains

It was a family member of Komal Patel’s who called her after seeing the images on the news.

There was only one flight out of Ahmedabad back to London that day, and she had only just been texting her brother Sunny and his wife Monali, who’d been on holiday.

The events of the past few weeks have been unfathomable.

A photo of Sunny and Monali Patel, who died in the Air India plane crash, on display at a vigil
Image:
Sunny and Monali Patel were about to celebrate their 10-year anniversary

In her first interview about her brother and her sister-in-law, Komal explains how she flew out to India with her cousin Jina to go and identify her little brother.

“Because we weren’t really allowed to see the body, I don’t think I’ve really come to terms with it. I still think I’m dreaming and it’s not really real,” Komal tells us.

Sunny and Monali Patel were in their 30s and about to celebrate their 10-year anniversary.

Jina and Komal Patel, whose relatives Sunny and Monali Patel died in the Air India plane crash
Image:
Komal Patel flew to India with her cousin Jina to identify her little brother

The couple were the “light” and “soul” of their families.

They loved having fun, playing with their nieces and nephews and adored travelling. Komal says her brother loved barbecues and her sister-in-law worked with children and adored hers too.

“They’re just really fun, exciting, really lived life, just made memories, just made everyone really happy,” says big sister Komal.

“They were like the heart of my kids. Whenever they walked into a room, they just filled up the room with laughter and happiness.”

A photo of Sunny and Monali Patel, who died in the Air India plane crash, on display at a vigil
Image:
A photo of Sunny and Monali Patel, who died in the Air India plane crash, on display at a vigil

The couple had been due to fly back home to London a week beforehand but postponed their flight.

“It has just been very traumatic, very, very sad for us, losing Sunny and Monali at 39 years old,” says their cousin Jina.

“They were full of life and brought so much light into our family. As a family, we’re devastated at why two people so young, with so much energy, who brought so much into our families have just sort of gone in one day.”

Read more from Ashna Hurynag:
Attacker told man stabbed in sword rampage: ‘I’m going to kill you’
Daughter’s ‘painful’ last memory of mum stabbed at carnival

A joint funeral for the husband and wife was held a fortnight ago and like hundreds of families impacted by this tragedy, the family are now rebuilding a foundation that has been shattered.

Continue Reading

UK

FCA considering compensation scheme over car finance scandal – raising hopes of payouts for motorists

Published

on

By

FCA considering compensation scheme over car finance scandal - raising hopes of payouts for motorists

Thousands of motorists who bought cars on finance before 2021 could be set for payouts as the Financial Conduct Authority (FCA) has said it will consult on a compensation scheme.

In a statement released on Sunday, the FCA said its review of the past use of motor finance “has shown that many firms were not complying with the law or our disclosure rules that were in force when they sold loans to consumers”.

“Where consumers have lost out, they should be appropriately compensated in an orderly, consistent and efficient way,” the statement continued.

Read more: How to tell if you’ve been mis-sold car finance

The FCA said it estimates the cost of any scheme, including compensation and administrative costs, to be no lower than £9bn – adding that a total cost of £13.5bn is “more plausible”.

It estimates most individuals will probably receive less than £950 in compensation.

The consultation will be published by early October and any scheme will be finalised in time for people to start receiving compensation next year.

What motorists should do next

The FCA says you may be affected if you bought a car under a finance scheme, including hire purchase agreements, before 28 January 2021.

Anyone who has already complained does not need to do anything.

The authority added: “Consumers concerned that they were not told about commission, and who think they may have paid too much for the finance, should complain now.”

Its website advises drivers to complain to their finance provider first.

If you’re unhappy with the response, you can then contact the Financial Ombudsman.

The FCA has said any compensation scheme will be easy to participate in, without drivers needing to use a claims management company or law firm.

It has warned motorists that doing so could end up costing you 30% of any compensation in fees.

The announcement comes after the Supreme Court ruled on a separate, but similar, case on Friday.

The court overturned a ruling that would have meant millions of motorists could have been due compensation for over “secret” commission payments made to car dealers as part of finance arrangements.

Please use Chrome browser for a more accessible video player

Car finance scandal explained

The FCA’s case concerns discretionary commission arrangements (DCAs) – a practice banned in 2021.

Under these arrangements, brokers and dealers increased the amount of interest they earned without telling buyers and received more commission for it. This is said to have then incentivised sellers to maximise interest rates.

Read more:
Storm Floris to hit the UK with 90mph winds
Teenagers arrested over murder of 19-year-old

In light of the Supreme Court’s judgment, any compensation scheme could also cover non-discretionary commission arrangements, the FCA has said. These arrangements are ones where the buyer’s interest rate did not impact the dealer’s commission.

This is because part of the court’s ruling “makes clear that non-disclosure of other facts relating to the commission can make the relationship [between a salesperson and buyer] unfair,” it said.

While it’s unclear exactly how many motorists could be eligible for any compensation, it was previously estimated that about 40% of car finance deals included DCAs.

Continue Reading

UK

Lucy Hargreaves was shot dead in 2005 – her home set on fire. A suspect in her murder is still at large

Published

on

By

Lucy Hargreaves was shot dead in 2005 - her home set on fire. A suspect in her murder is still at large

Britain’s most-wanted fugitive is still on the run – exactly 20 years after the fatal shooting of a young mother of three.

Kevin Parle is a suspect in the murder of Lucy Hargreaves, 22, who was shot dead at her home in Liverpool before the house was set on fire on 3 August 2005.

Since then, after many appeals for information, there has been no confirmed sighting, word or trace of him.

Two decades on, Ms Hargreaves’ family have had no justice. Two young men prosecuted for her murder had charges dropped when a judge ruled there was insufficient evidence against them.

In a statement marking the anniversary of her death, they said: “The way we lost Lucy is not something families can ever truly come to terms with – it is still incredibly difficult and painful to think about.

“Over the past 20 years, people will have talked with family and friends. A number of people were contacted by males using a phone that was stolen along with a vehicle used in Lucy’s murder.

“We appeal directly to them to please come forward. Now is the time.”

Kevin Parle age progression prediction pics
Image:
Police prediction of how Kevin Parle has aged since 2005. Pic: Merseyside Police

Three men burst into Lucy’s home 20 years ago today, shot her dead as she slept on a sofa, and set alight the duvet she’d been sleeping under.

It’s believed the gang were looking for her boyfriend Gary Campbell, who was upstairs. He fled from a window with their two-year-old daughter and then tried in vain to save Ms Hargreaves.

Mr Campbell had allegedly been a passenger in a stolen car that had hit and killed a young boy 12 years earlier, supposedly the motive for the shooting. He denied he was in the car at the time.

Lucy Hargreaves with her three children
Image:
Ms Hargreaves with her three children

Howard Rubbery, head of the Serious Crime Review Unit at Merseyside Police said: “The family remain absolutely devastated by Lucy’s death.

“It’s important to note Lucy is an absolutely innocent victim. She’s not from a family of criminality. She wasn’t involved in criminality.

“The hunt for Kevin Parle is very much on, and we ask anybody with information, anybody who is close to Parle and knows where he is, to please come forward.

“There were three males responsible for this offence and we are looking for justice for Lucy’s family in relation to all three.

“I do believe that there are people out there who have yet to speak to the police, even though it’s 20 years on, who hold information that’s absolutely vital to our investigation.”

Police believe Parle, now in his 40s, fled to Spain where he hid among the vast expat community with criminal help.

Several years later, I tracked his movements to a holiday complex near Torrevieja, where staff convinced me he had stayed there for several weeks.

Former Scotland Yard detective Peter Bleksley
Image:
Former detective Peter Bleksley says Parle is being protected

‘Huge value to organised crime’

Former Scotland Yard detective Peter Bleksley, who recently spent four years on a personal hunt for Parle, also visited the complex and said: “He was bold and he was brash and he had a girlfriend at one point.

“The police actually should have captured him there, but they were too late.”

He claimed he nearly caught up with Parle at a villa elsewhere in Spain, but spooked him into disappearing again.

Mr Bleksley hosted an award-winning podcast and wrote a book in which he chronicled his manhunt.

He said: “Kevin Parle has remained hidden because he is funded, protected, looked after and of huge value to global, serious and organised crime.”

Parle can’t be hard to spot – he’s well-built, 6ft 5in tall, red-haired with a face scar and, originally at least, has a Liverpool accent. Of course, he might be dead.

Mr Bleksley said: “I can think of many reasons why certain criminals would want to get rid of Kevin Parle because he could, in terms of evidence about the cases that he’s wanted for, should he flip and become a witness for the Crown, be highly damaging for a lot of very tasty criminals.”

16-year-old Liam Kelly
Image:
16-year-old Liam Kelly was shot dead a year before Ms Hargreaves. Pic: Merseyside Police

Parle is also wanted in connection with the murder of 16-year-old Liam Kelly, who was shot dead over an alleged £200 debt in June 2004, a year before Lucy’s death. Parle was arrested and questioned, but then freed on bail.

There have been reports of the fugitive in Australia and Dubai, but nothing to corroborate any of them.

If he’s alive and if no one is prepared to shop him, what might lead to his capture?

“I think when he has a fallout with those who have guarded him, funded him, fed him, put a roof over his head and all of that, maybe even paid for his plastic surgery that could have altered his appearance,” Mr Bleksley said.

“When he finally has a fallout, when he’s no longer of use, then perhaps that will be the day that somebody goes, Peter, he’s here.”

Continue Reading

Trending