Come the spring I’m fully expecting the clocks outside the country’s town halls to go Swiss, not in terms of accuracy but to feature a cuckoo on the hour, just to remind us the direction that we’re heading in.
I’m suggesting that as a nation we’re going both metaphorically cuckoo and that as far as the mortgage lending business is concerned we’re about to have a cuckoo in the nest.
Local authorites in England and Wales are drawing up plans to pool the funds they hold on deposit to lend to local businesses and the councils in Liverpool, Hartlepool, Barnsley, Manchester, Lambeth, Essex, Kent, Portsmouth and Bristol are revisiting the 1980s with the intention of launching as mortgage lenders.
True, with the Tripartite Authorities virtually relegating securitisation to the dustbin of history, there’s a case for local authorities to enter the market again and help out the building societies because, then as now, there is no way that mortgage demand can be met by retail funds alone.
But their contribution had been small – at its peak mortgage lending by local authorities accounted for around 600,000 loans – and that was back in the days when they had an infrastructure to support this activity and they didn’t have the complicated regulatory framework in place today.
And at what price would these mortgages come, given that council tax has increased by over 100% since New Labour came into power?
Compared with the public sector with its huge pensions black hole, its flexi-time culture and holiday entitlements that can deliver up to 55 days leave a year, building societies look mean and lean, even those with management expense ratios over 60 or 70%.
And as custodian’s of the public purse the local authorities’ track record doesn’t smack of prudence either with many losing millions of pounds in Icelandic banks that anyone with a smattering of commonsense would have left well alone.
But where’s the accountability in regimes where council staff very often don’t even live in the area where they work and where the turnout at local elections is so small that they can be influenced by a small clique of activists with their own agenda of self-interest at heart?
The shame is that they could well be foisted on us and all because the government, having saved the world and spent billions of pounds on a number of favoured banks, still hasn’t the appetite to action the Crosby report.