Hounslow’s debt mountain leaves residents paying more for less

While Hammersmith & Fulham builds financial cushions, Hounslow’s billion-pound borrowing, risky punts and Lampton bailouts are draining council coffers and pushing up Council Tax

Guest blog by Cllr Theo Dennison

How a debt mountain creates a budget black hole

Stand at the border between Chiswick and Hammersmith and you can see two councils living on the same planet but playing by very different financial rules.

One is building up cash cushions, borrowing prudently and even turning a profit on its books. The other is edging towards a billion-pound debt mountain, raiding residents’ wallets to pay interest, and shovelling money into a failing side-venture.

Which side of the border would you want to live on?

The debt mountain that eats your Council Tax

Hounslow’s latest Treasury Management Report submitted to the Council on 16 September, laid it all bare.

In 2024/25, the borough’s debt charges consumed 9.9% of the council tax – so one in every ten pounds of your council tax went straight to service debt. Not to fix potholes, not to run libraries, not to clean the streets. Just to pay the interest on a credit card no longer in safe hands.

Now compare that to our neighbours in Hammersmith & Fulham.

Their accounts show the reverse: debt costs in the General Fund are a net benefit. Investment income outweighed interest payments, so the burden was –1.4%. Yes, you read that right, it’s has a minus sign – they are saving residents money, while Hounslow bleeds it.

The Fidelity fiasco

The difference comes down to choices. Hammersmith & Fulham keep their investments short, simple and safe. Hounslow? Not so much.

Last week, Hounslow finally confessed it had pulled the plug on its investment in the Fidelity Multi-Asset Income Fund. It had gambled £20 million of taxpayers’ money. When they pulled out, their stake was worth just £16 million.

A 20% loss crystallised, £4 million less in the council coffers. Officers tried to spin it as prudent – better to get out than lose even more – but the fact remains: that £4 million of taxpayers money has gone.

That’s money that could have been used fixing pavements and potholes, boosting youth services or freezing council tax. Instead, it vanished in a speculative gamble on the money markets.

The big Lampton cash-gobbler

And then there’s Lampton, Hounslow’s wholly-owned business empire. Set up to buy homes and run services, it has become a colossal drain on its parent.

The latest outturn shows a whopping £226 million loaned to Lampton Investment 360. Think of it as the council providing a dodgy loan, using your money, to its much loved but entirely dissolute son.

Lampton is struggling to keep up with its payments. Last year it was late on three separate quarterly interest payments, by as much as 80 days. It had to be given a cash advance by the Council just to tide it over.

Get that straight, the Council gave Lampton more money so it could pay the interest it had agreed to pay on the money it already owed it back. That’s not a thriving business; that’s a cash gobbler.

And here’s the kicker: there is absolutely no sign Lampton is generating enough surplus to ever repay the £226 million principal.

Its income is barely covering its operations. Unless its assets are sold off, the debt will sit there indefinitely, with taxpayers on the hook for more.

This black hole grows

Put the pieces together and you see why Hounslow’s finances are causing some local councillors concern.

Its official Capital Finance Requirement or CFR (the technical measure of its debt capacity) is already at £864 million. Net debt is climbing every year.

The Council has also increased its borrowing ceiling every year since 2022, and debt has tripled since I left office.

But however much it adds to what it can carry on its credit card it’s taking losses on speculative investments and its wholly-owned business empire is burning through cash.

Hammersmith & Fulham isn’t perfect, but it knows the danger of debt: borrowing well within its limits, keeping cash liquid, and ending each year stronger.

What it means for residents

If Hounslow’s trajectory continues, it will have a £1 billion debt mountain by the end of the next council term, and every year until then your council tax will rise, and more and more of it will be swallowed in servicing that debt.

For Chiswick and the wider borough, the story is simple.

Hounslow’s debt service costs mean there is less money to spend on street cleaning, on repairs, on youth clubs, on social care. It’s why residents are right when they say they are always paying more but seeing less.

And unless the council changes course, the black hole only deepens. More borrowing, more risky punts, more Lampton bailouts – all funded from the same source: your council tax.

So next time you look across the border – at cleaner streets and lower tax bills – remember it’s your choice: a council that’s financially efficient or one addicted to spending your money.

The numbers never lie, that’s why Hounslow is struggling and why residents would be right to demand a better deal.

Theo Dennison is the Independent councillor for Syon & Brentford Lock, elected in March 2025. 

Prior to 2022 he was a Labour councillor and until 2018 had been the Cabinet member for Finance.

Copies of all council reports used or mentioned in this blog are available on the council websites – among the agendas of the Cabinet and Council meetings at which they were discussed.

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