News round-up: Record low for 10-year gilts, Bond agency banks, Croydon’s 1,000 homes, London CIV award, shared service deal
0Record low for 10-year gilts
Yield for 10-year gilts this week hit a new record low of 1.25% (4pm, 8 June). Reports from Bloomberg and The Financial Times suggest the price has been affected by the coming Brexit referendum on 23 June. The BBC reported the price was also affected by concerns about a week global economy and uncertainty over US interest rates. The last time gilts approached current prices was during the 2012 euro crisis. The BBC reported concerns about the 30-year gilts also fell to 2.1%, the lowest level since 1996
Bond agency selects banks
The UK Municipal Bonds Agency has confirmed completion of its bank selection process ready for its first bond deal. The names of the banks have yet to be made public. In April Room151 reported that the Brexit referendum and local council elections had delayed work at the agency. At that time chief executive Aidan Brady said the agency was in talks with councils to gauge the appetite for a bond issue later this year. “Once we are there, we will set out the terms sheets which will outline the rates at which councils will be able to borrow,” he said.
Croydon’s 1,000 new homes Brick by Brick
Croydon Council has revealed ambitious plans to build 1,000 news homes by 2018. The council has identified 50 sites in the borough for development by its arms-length development company Brick By Brick. Cllr Alison Butler, deputy leader and cabinet member for homes, said: “We can no longer afford to sit back and let the market take its course, as it is just not delivering enough homes to meet demand, leaving many of our residents homeless or stuck in temporary accommodation, unable to afford to rent or buy.”
Basingstoke stands against combined authority
Councillors in Basingstoke have voted against Hampshire County Council’s proposal to abolish 11 district councils to create a single authority. Basingstoke will now push ahead with an independent review looking at its options which include the possibility of becoming a unitary authority. Council leader Clive Sanders told the Basingstoke Gazette it was “very sad that instead of working together for the benefit of residents, we have found ourselves at loggerheads with Hampshire county council following their decision to develop their own proposals without consulting us or any other councils.”
Award for London pension scheme
London CIV has won an industry award for the quality of its “risk management, asset allocation, portfolio construction and securities selection”. The accolade for a public pension scheme below €15bn was given at the Chief Investment Officer Innovation Awards. Hugh Grover, chief executive of London CIV, said: “We’re really pleased to receive this award as recognition of what we have achieved as the first fully authorised and regulated investment management company set up by local government, for local government the UK.”
Shared finance service deal
A joint deal for Capita to supply Richmond and Wandsworth councils with a new shared finance system has be agreed and expects to provide savings for the authorities of £10m each. The contract will run for six years but also establishes a framework for other London councils to use the shared service solution.
‘Unreasonable customer’
Cumbria County Council have imposed an “unreasonable customer” notice on one of its residents after numerous freedom of information requests about the authority’s local government pension scheme. The North West Evening Mail reveals that Loppergarth resident Steve Atkinson received the notice. The council told the paper: “”While the council will not discuss individual cases, our unreasonable customer policy is only applied after careful consideration and is only applied in exceptional circumstances.” Sanctions under the notice include refusing to deal with correspondence and limited someone’s time with council officers.
