News Roundup: Bond agency warning, asset register demand, Welsh LGPS tender
0Adviser urges caution over bonds agency
Investment adviser Arlingclose has warned councils to “carefully consider their future funding requirement” before signing up to become shareholders in the Municipal Bond Agency (MBA). It said: “The joint and several guarantee, whereby borrowers guarantee that the MBA will repay all investors on time and in full, is a distinct disadvantage of the MBAs funding proposal. This guarantee could potentially extend for 75 years or more.” It added that potential borrowers should consider whether the MBA will be able to build their loan book “at a sufficient pace to ensure that operating margins cover their costs”.
Government demands asset registers
Councils will be required to draw up lists of assets held for more than two years in a new drive to release public sector property. Cabinet Office minister Matt Hancock this week said that amendments to the Housing and Planning Bill will be introduced which will also ask councils to provide reasons for holding their assets. Councils will have to provide information on housing they have held for six months or longer.
Welsh LGPS funds issue passive tender
Welsh Local Government Pension Scheme funds are tendering for a joint manager of their passive equity and bond holdings. The mandate is expected to cover £2.6bn of investments. The eight Welsh funds are currently bidding to create their own £11bn investment pool under government reforms.
Swinney bats off settlement criticisms
Criticism of cuts to local authority budgets by the Scottish Government are “over the top” according to finance secretary John Swinney. Council have until 9 February to sign up to a deal that will mean a 2% fall in their income. But, speaking to a committee of MSPs, Swinney said that councils had been given a “very credible settlement”.
Revenue expenditure falls
Total revenue expenditure by local authorities in England was £95.9bn in 2014-15, a decrease of 0.5% from £96.4bn in 2013-14. The figures, revealed in a final outturn release from the Department for Communities and Local Government, said that 25.0% of revenue expenditure was estimated to have been funded through council tax, and 11.8% raised through the business rate retention scheme.
LGA calls for protection from cuts
The government must provide transitional support for councils over the next two years to cushion them from the withdrawal of revenue support grant, according to the Local Government Association. It said the funding changes mean 168 councils face losing all this government funding by 2019/20. Cllr Sharon Taylor, LGA vice chair, said: “Smoothing out funding cuts over the next few years is one of the essential ways the government can give local authorities the best chance of being able to protect the services communities rely on over the next few years.”
Transport body announces property partners
Transport for London has named 13 property companies that will feature on its development panel, the Property Partnership Framework. TfL says the framework will speed up development on more than 50 of its sites, two-thirds of which are in zones one and two. The body says that the land will provide 10,000 homes across 300 acres in the capital.
