News round-up: Pay to Stay rethink, DMO unveils linker bond, West Midlands’ devolution cash
0Councils demand Pay to Stay rethink
Local government faces costly appeals and challenges to new rules forcing higher income tenants to pay more in rent, according to the Local Government Association. The LGA said that the new Pay to Stay policy will mean councils need to invest millions of pounds in new IT systems and staff to write to more than a million social housing tenants to understand in detail their household income. Nick Forbes, LGA senior vice chair, said: “For families this will cause anxiety, uncertainty and costs. For councils it will generate bureaucracy and new administrative costs and complexities. And at the end of it, for government, it will generate nowhere near the financial return it had originally expected.”
DMO announces ‘linker’ bond issue
The UK government has announced it will issue a long-dated inflation-protected bond later this year. The Debt Management Office announced this week that it will issue a syndicated index-linked bond with a maturity of 30-years or more in late November. Appetite for “linkers” has jumped in the wake of the Brexit vote, with the Bank of England forecasting inflation will overshoot its 2% target in 2018. The DMO also announced it would issue a 20-year index-linked gilt on 4 October and a 10-year linker bond on 8 November.
West Midlands receives first devolution payment
The government has transferred £36.5m directly to the new West Midlands Combined Authority through its devolution deal. The payment is the first of £1.1bn earmarked for the authority over the next 30 years. Communities secretary Sajid Javid said: “Today’s £36.5m boost is proof that we will equip them with what they need to fire up the Midlands Engine — the ability to boost long-term growth, create jobs, improve skills and invest in transport and innovation.”
Scottish councils ‘struggling to find cash’ for childcare plans
Councils in Scotland have “no idea” how they will introduce Scottish government plans to double provision for free childcare. Aberdeen City Council leader Jenny Laing, who also heads the Scottish Local Government Partnership, comprising Glasgow, South Lanarkshire, Renfrewshire and Aberdeen, told The Scotsman: “It’s all good and well ministers making this high-profile announcement, but it’s been done without a thought for the local authorities who have to deliver it.” The Scottish Government insists the plans have already been fully funded.
