Hounslow Council Leader Shantanu Rajawat responds to criticism over Hounslow’s finances

Cllr Rajawat defends the borough’s borrowing strategy and the role of the Lampton Group

In recent weeks, The Chiswick Calendar has published guest blogs from two opposition councillors – Independent Cllr Theo Dennison (Syon & Brentford Lock), a former Labour Cabinet Member for Finance, and Conservative Cllr Jack Emsley (Chiswick Homefields), a member of the Council’s Oversight & Scrutiny Committee – both criticising the Council’s debt levels and its management of the Lampton Group, the authority’s wholly owned company.

READ ALSO: Hounslow Council’s £240m gamble is a ticking timebomb, says Cllr Jack Emsley

READ ALSO: Hounslow’s debt mountain leaves residents paying more for less, says Cllr Theo Dennison

Here, Labour Council Leader Shantanu Rajawat offers his reply, rejecting their characterisation of Hounslow’s finances and arguing that the borough’s borrowing and investment strategy remains prudent and sustainable.

Leader of Hounslow Council, Cllr Shantanu Rajawat

Fact-checking the fear-mongers

Guest blog by Cllr Shantanu Rajawat

Over the last couple of months, opposition Councillors Emsley and Dennison have written articles that have made some wild and inaccurate claims about the Council’s finances.

While Cllr Emsley is a Tory and Cllr Dennison is an Independent, both are looking to score cheap political points in the runup to elections next year.

Council finance can seem like a complicated and esoteric subject. I can forgive Cllr Emsley for not understanding our financial situation. Cllr Dennison, however, should know better.

It is easy to shout “Fire!” in a crowded theatre. It takes longer to explain that there isn’t one.  So here goes…

The grass is always greener

Hounslow is not an outlier. Our Council Tax is around the London average for a Band D property.

As for debt, of 254 councils who responded to a recent FOI request, around a fifth of their council tax revenue is spent on debt interest. That is far higher than what we pay in Hounslow.

Prudent financial management has meant that we are in significantly better shape.

Just plain wrong

Cllr Dennison claims that our ‘borrowing ceiling’ has increased every year since 2022. That is not true.  In fact, we lowered it significantly in 2024.

That is fiscal discipline, not unchecked expansion.

Lies, damned lies, and statistics

His article also claims that the £864m Capital Financing Requirement (our combined debt) will grow to over £1 billion, with more council tax being used to service that debt.

That is also not true, and he knows it. Two thirds of that debt come from the Housing Revenue Account, which, by law, cannot be charged to Council Tax.

What about Lampton?

Lampton Group is a Council-owned company. It delivers services like waste collection, leisure facilities and parks maintenance, and – most importantly – our social housing schemes.

Money goes in and homes come out. It really is as simple as that.

Lampton allows us to provide services that are too costly to be brought in-house. It gives us greater control over those services, and it means we don’t have to rely on expensive external providers making big profits from the public purse.

When we lend money to Lampton, they pay us a higher rate of interest than the money we borrow to make these loans. This is a net positive return for the General Fund.

Despite his mock outrage, Cllr Dennison knows this.  The Cabinet Member for Finance at the time when many of these loans were agreed was… (you guessed it) Councillor Theo Dennison.

Why have any debt at all?

Borrowing money is a normal way for councils to deliver for their residents.

When you borrow money to buy a house, you don’t describe yourself as being in a financial ‘black hole’ or struggling under ‘a debt mountain’.  You become a homeowner. You now own a valuable asset.

It’s the same in Hounslow.  Borrowing has allowed us to build decent and affordable homes to tackle the housing crisis. It means real, tangible ‘assets’ – homes for our residents and guaranteed rental income for the Council.

Labour councils build more social housing. It is in our DNA to try to house and provide for our residents. Without this housing, we would spend millions more each year on homelessness and Temporary Accommodation.

Long-term housing investments have provided security for residents and for the Council. We have a duty to provide for residents and guarantee good value for money. Hounslow’s approach allows us to do both. The Tories would have us do neither.

More for less – or better value for money?

Cllr Dennison’s central argument is that residents are paying more for less. He reaches this conclusion by pointing to the different ways other councils have managed their investments.

To return to the house analogy, it’s the difference between building up a savings account and buying a house.  Some councils have held on to cold cash, Hounslow has chosen to invest in homes, infrastructure and services for its residents.

Our different balance sheets reflect different strategic decisions, not financial strengths or weaknesses. But providing more homes, infrastructure and services per pound of debt is surely the very definition of getting good value for money.

So, where does all the money go?

Simple answer: “The Tories cut it”.

The longer answer… Since 2010, the Tories cut our government funding by around two thirds.

This left council taxpayers having to shoulder more of the burden, just as Tory austerity forced more people to turn to local councils for support.

Around half your Council tax is spent on statutory services like social care. These are services we have a legal (and moral) obligation to provide. As demand for these services rises, so too does the cost to local government.

Inflation also makes these services more expensive. Every 1% inflation costs the Council around £4 million. Under the Tories, inflation peaked at 11%.

After 14 years during which the cost-of-living spiralled out of control, public services were slashed, and communities like ours were hardest hit, the Tories have some nerve to complain about our finances.

We won’t take lessons from the Tories. Firefighters don’t take lessons from arsonists.

Is there light at the end of the tunnel?

Yes. The Labour Government is now offering Local Authorities long-term settlements, which gives us stability to plan for the future.

As an outer London borough, we have historically been underfunded. The Government’s Fair Funding Review should help address this – better reflecting the level of local need.  We’re not out of the woods, but there is light through the trees.

Meeting the challenge

Almost no council is in great financial health. How could they be?  Despite suffering 14 years of financial strangulation, Hounslow’s finances are in remarkably good shape.

We can go on tackling inequality, investing in public services, promoting sustainable growth and supporting our residents because we have taken good care of our finances.

We have invested where we needed to invest, fixed the roof while the sun was shining – and even when it wasn’t – and we have looked after the most vulnerable in our society.

We will continue to do just that.

So, next time you hear opposition councillors squawking indignantly, just ask yourself whose lines they are parroting and whose interest they might serve.  For what kind of person would shout “Fire!” in a theatre?

I wish both Councillors the best of luck in next May’s election.

Cllr Shantanu Rajawat is the Labour Leader of Hounslow Council. He has represented Heston West ward since 2014 and became Council Leader in May 2022.