LGPS reform, Worcester viability in doubt, Sub-sovereign borrowing, Cuts to poor areas, Admin costs
0Ministers urged to set timetable for LGPS reform
The government should agree a timetable for its proposed reform of the Local Government Pension Scheme by the end of the summer, the LGPS Shadow Scheme Advisory Board (SSAB) has recommended. The government is currently considering its options on whether to merge existing funds after receiving advice from advisors over Christmas. The SSAB said that the government should consult on options for reform as soon as possible, and said “any reform must meet the original objectives of delivering benefits to employers, local taxpayers and scheme members.”
Worcester council viability doubts
The leader of Worcester City Council has said that his council’s viability is in doubt thanks to government spending cuts, according to the Worcester News. The council is drawing up plans to cut around £4.1 million from its budget by 2019. During a council committee session, council leader Adrian Gregson admitted that questions over the viability of the council, along with a number of others across the country were in doubt, and that moves to share services with other councils had ground to a halt.
Sub-sovereign bodies ‘increasing capital market borrowing’
Sub-sovereign bodies across Europe are expected to rely more heavily on capital markets in coming years, according to ratings agency Moody’s. A report on the sub-sovereign sector released this week said that in the UK, housing associations and universities will increasingly access capital markets. However, it says local authorities will continue to rely on funding via the Public Works Loan Board. Last month, Moody’s commented positively on the potential creation of a bonds agency as another source of borrowing for councils.
Poorest areas ‘hit hardest by cuts’
Government cuts to local authorities are hitting poorer areas much harder than more affluent ones, says new research. According to the Guardian, former Newcastle City Council treasurer Paul Woods has found that councils in the 10 most deprived areas are facing cuts averaging 25.3 per cent up to 2016, compared with just 2.54 per cent in the 10 least deprived areas. It found that Liverpool City Council, which has the highest deprivation levels, is suffering cuts of 27.1 per cent, while Hart District Council, with the lowest poverty score, is facing cuts of 1.5 per cent.
Councils reduce benefit administration costs
In 2012/13, councils spent £827 million administering housing and council tax benefits on behalf of the government, says a report released by the Audit Commission. According to its figures, the Department of Work and Pensions paid £466 million toward this cost, with councils funding the remaining £361 million. This meant councils spent 3.1 per cent less in real terms on administration than in 2011/12, it said. Its analysis showed that £125 million could have been saved in 2012/13 if councils had reduced their spending to the average for councils of their type with a similar caseload.
