News Round-up: Fitch Verdict, Metro’s Float, Lancs Investments, Housebuilding in London
0Fitch verdict backs local authority financial framework
English councils operate under a strong institutional framework, according to ratings agency Fitch. It said: “This is based on vertical equalisation funding, a robust prudential regulatory regime, a stable inter-governmental relationship, relatively good transparency including financial forecasts, sound protection for creditors, and adherence to international accounting standards.” However, it added that UK is one of the most complicated countries in western Europe to analyse local authority finances.
Metro Bank floats following capital boost
Metro Bank has floated on the stock exchange after raising £400m of new finance through private capital. Craig Donaldson, chief executive of the challenger bank, said: “Building the bank from the ground up has given us some great advantages. The funds we have raised will power the next phase in Metro Bank’s growth across our multi-channel offering.”
Lancashire ups investment in housing developer
Investment in shared ownership housing provider Heylo Housing has been increased by Lancashire County Pension fund from £180m to £300m. The company said that it has already invested more than a third of the initial tranche, with the rest committed. Heylo provides more than 600 affordable homes across 40 local authorities and says that it expects to double that by the end of this year.
Greater council freedoms ‘could boost housebuilding in London’
Councils in the capital must be given greater funding freedoms in order to double the capital’s supply of new homes to 50,000 a year by 2020, according to a new report. The report of an independent review for the London Housing Commission, led by Lord Kerslake, says that councils should be able to levy council tax on developments that fail to meet agreed building targets. In addition, they should be able to retain a substantial proportion of stamp duty income in return for an equivalent reduction in grants from central government. Both the Greater London Authority and boroughs should be allowed to borrow more for housebuilding and infrastructure, the commission said.
Greater Manchester appoints three investment managers
Three firms have been appointed by Greater Manchester Pension Fund to a new framework for securities investment management. KKR, Oak Hill Advisors (Europe), Stone Harbor Investment Partners have been selected to manage two separate global credit mandates totalling £750m.
London councils more cautious than rest of England on council tax rises
Councils in England are set to increase council tax by up to the maximum 3.99% allowed next year, while London maintains a virtual freeze, according to the Chartered Institute of Public Finance and Accountancy (CIPFA). Total adult social care precept income for England in 2016/17 will be £385.2m out of a total possible amount of £ 394.3m. Inner London has the lowest average band D increase for 2016/17 of £4.96, while the North East has the highest at £59.62.
Drop identified in council spending
Net current expenditure by councils in the third quarter of 2015/16 is estimated to be £27.8bn, a drop of 1.7% on the same period last year. Outturn figures released by the Department for Communities and Local Government reported forecast net current expenditure for 2015-16 reported in quarter three is £112.8bn, 0.2% lower than the initial budget estimate of £113.1bn.
