Kingston independence plans, S&P ratings ban, Property disposals, Cockell to chair bond agency…
0Lukewarm response for Kingston independence proposals
Civil servants appear to be reluctant to grant a request from London Borough of Kingston to opt out of the current council funding system. Officers from the council met with Whitehall officials last year to discuss the proposal, which would see the council forgo central government grant and instead keeping a greater share of local business rates. However, a paper that was submitted to a full council meeting last week said that a study by the civil servants pointed out that the government’s current share of business rates is used to equalise resources between high and low earning councils.
Sheffield extends Capita outsourcing deal
Sheffield City Council has opted to extend its existing outsourcing partnership with Capita for another six years. The original seven year contract was signed in 2009 and covers services including ICT, revenues and benefits, HR and payroll and financial business transactions. The extension of the contract will generate additional revenue to Capita of up to £170m, according to an announcement by the company.
Nottingham set to bail out HCA
Nottingham City Council is set to buy a 50% stake in a local asset backed vehicle currently owned by the government’s regeneration quango. According to reports, the council is ready to take on the Homes and Communities Agency’s share in Blueprint. The joint venture with developer Igloo Regeneration Property Trust, owns a number of sites across the East Midlands, including five sites in Nottingham. The LABV made losses of more than £2m a year in 2013-14 and 2012-13.
S&P settles securities cases
Ratings agency Standard & Poors has agreed to withdraw from a specialized area of the commercial real estate market for one year following a settlement with the US Securities and Exchange Commission. The company agreed to pay $58m to the commission plus $19m to prosecutors in New York and Massachusetts to settle an investigation into misconduct relating to ratings of “conduit fusion” commercial mortgage-backed securities. As part of the deal, the agency has agreed to steer clear of rating the category for 12 months.
Councils outsource pensions admin to Surrey
The London boroughs of Kensington & Chelsea and Hammersmith & Fulham are to outsource their pension scheme administration to Surrey County Council. The move will see both cancel their current contract with Capita. The councils are in a service sharing partnership with Westminster City Council, for which Surrey has delivered pension administration since September.
Leap in council income from property disposals
Property disposals were the main cause of a 25% rise in capital receipts by local authorities between 2012/13 and 2013/14, according to new figures released by the Department for Communities and Local Government. The final outturn figures show that capital expenditure rose from £18.9bn to £19.7bn over the period. Capital expenditure on planning and development services rose by 29% while such spending on education fell by 17%
Cockell appointed as bonds agency chairman
The company running the emergent local government bonds agency has appointed former Local Government Association chairman Sir Merrick Cockell as its inaugural chairman. Adrian Bell, formerly chairman of RBC Europe Limited and now the head of debt markets at Canaccord Genuity in London, will become vice-chairman. Sir Merrick said: “Councils should not have to form an orderly queue at the door of the Treasury to ask for permission to finance their projects.” The remainder of the board will be appointed in the near future.
