Andrew Bydder: Councils Have to Break the Spending Addiction

Councils love spending other people’s money. But if it goes on for too long, the public get annoyed at rates rises and vote out the councillors. That’s how it is supposed to work. But everything changed after the GFC. Councils discovered a magic money tree!

The Local Government Funding Agency (LGFA) was created in 2011 in response to the Global Financial Crisis. Banks had stopped lending to everyone, which caused problems for debt-funded council infrastructure programmes.