The financial health of Britain’s local government can be assessed by examining the situation with green waste-bin collections in Barnet Council, located in north London. The council has announced that it will increase the price of these collections by 39% next month, which is significantly higher than the average inflation rate in the past year. This news has caused discontent among residents, who are now expressing their frustration on a neighborhood chat app and vowing not to pay the increased fees. As a result, there may be an increase in overgrown lawns and hedges in the area, with some predicting a rise in backyard garden-waste bonfires that could lead to a deterioration in air quality.
However, when we think of a financial crisis, we typically imagine collapsing markets, threats to banking stability, and widespread job losses. Nevertheless, the financial difficulties facing UK local authorities do not manifest in such dramatic ways. Britain’s municipal debt market is relatively small and councils cannot technically go bankrupt, so the crisis lacks the mechanisms that would cause a wider financial market contagion. Despite this, the financial challenges that local authorities are facing are very real and pose a significant problem for the economy.
