Core Cities to Quit LGA, LA Ratings Downgrades, Oxford Bad Debt, Winchester Bank

Core Cities to quit Local Government Association
Eight UK cities have served notice of their intention to leave the LGA. Birmingham, Bristol, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield said in a joint statement: “Whilst we recognise that there are matters which affect a large number of local authorities in a similar way, there are a range of critical issues which affect large urban areas differently, and on which we need to have more focused representation at the national level.” The LGA also received news of a £2m funding cut from central government last week.

Oxford writes off debt
Oxford City Council has had to write off over £800,000 in bad debt. The amount included £675,052 in unpaid business rates along with unpaid council tax and overpaid housing benefit. The council’s chief executive warned that more money would need to be set aside for unpaid debts given the economic climate.

LGA backs Community Budgets, slams council tax grants
The LGA and the government have produced The Community Budgets Guide to describe how a Community Budgets approach should create better service and enhanced savings. The guide explains the efforts made by the four pilots in Essex, Manchester, London and Cheshire and is aimed at councils looking to take up the approach. Meanwhile the LGA has declared the government’s help for councils who freeze council tax as “short term”. Commenting on the publication of council tax levels for 2012/14, LGA chairman Sir Merrick Cockell added that further cuts to councils in last week’s budget would leave them struggling to protect frontline services.

Fitch places institutions on watch
Fitch Ratings has placed LB Wandsworth and Transport for London on rating watch negative (RWN). The move follows the RWN on the UK’s long term issuer default rating last week (dependent entities, such as councils, may not have a higher ratings status than their sovereign). The UK’s status means that it may well see a credit downgrade toward the end of April.

Review New Homes Bonus: NAO and LGA
The LGA has added its voice to that of the National Audit Office, calling for a review of New Homes Bonus. “Mistaken forecasts and a lingering uncertainty over future income from the New Homes Bonus are hampering councils’ efforts to plan their medium to long-term budgets,” said a spokesman.

Winchester mulls local bank
Winchester City Council may consider setting up a local bank, according to its cabinet member for finance. The authority would look at partnering in a similar way to Bournemouth Borough Council (which is working on the concept) to establish a local bank to help stimulate Winchester’s economy.

UK public sector is outsourcing giant
The UK has been found the largest single public sector outsourcing market outside the US and account for 84% of EMEA public sector outsourcing. The market in the UK was worth over €4.4bn last year, even taking into account contracts worth more than €4m. The rest of Europe, the Middle East and Africa accounted for €900m. The UK public sector accounts for 55% of total outsourcing in the country with the private sector spending €3.7bn.