News Roundup: Devolution for Queen’s Speech, shared service savings, CEO for London CIV, Swansea’s commercial approach
0S&P puts a watch on Clydesdale Bank
Ratings agency Standard & Poors has put its ‘BBB+’ ratings on Clydesdale Bank on CreditWatch with negative implications. The move follows news that holding company National Australia Bank is considering a demerger and IPO. A statement by the agency said: “The CreditWatch placement reflects our view that we could lower the ratings on Clydesdale if, upon completion of the transaction, there is no improvement in Clydesdale’s stand-alone credit profile to offset the reduction in extraordinary group support from NAB.”
Tories to legislate for devolution
Chancellor George Osborne has announced a cities devolution bill will be included in the forthcoming Queen’s Speech. The bill will allow cities powers over housing, transport, planning and policing, in return for the election of city-wide mayors. But there was no sign of extra tax-raising powers for the chosen cities. Osborne also said that he would extend a form of the City Deals programme to the counties and towns of the North of England, raising the prospect that they might be able to retain more locally-raised taxes.
Shared services save almost half a billion
Councils have made £462m of savings by sharing services between each other since 2012, with £105m of the total coming in the past year, according to the Local Government Association. Savings from joining up back office functions, such as legal, audit and HR, have resulted in £145m in cost reductions. Councils sharing services and management with other public sector organisations have saved more than £15m, the LGA said.
Grover steps up at London CIV
The London LGPS collective investment vehicle has appointed Hugh Grover as its chief executive. Grover oversaw the development of the new CIV while working for London Councils. The CIV, wdue to make its first investment sometime this year, also this week awarded Northern Trust a contract to provide fund administration and depositary services.
Council loses stadium loan interest
Wasps RFC have paid off in full a £13.4m loan made by Coventry City, 20 years early. The loan was used to fund the club’s purchase of the Ricoh Arena. The loan has provided an estimated return of around £1.5m for the council over the past two and a half years. The early repayment means it won’t receive any more interest on the loan.
Norfolk struggling to pay for care plans
A black hole of £7m has been discovered in plans by Norfolk County Council to shift institutional residential and day care to in-community support. The council is planning to use £3.8m from its reserves to plug the funding gap, but the adult social services budget is still short of the total by £3.3m. Conservative councillors attacked the current budgeting for the department. The council is run by an alliance of Labour, UKIP, independent and Liberal Democrat councillors with support from the Green Party.
Commercial approach for Swansea
Swansea Council has agreed to adopt a corporate framework to increase commercial activity. The council will also establish a new post of head of commercial services. A report due to go before councillors said that “austerity, the significant reduction in grant and the increasing pressure on our services makes it imperative that we are more commercial in everything that we do”.
Pension fund appoints fund manager
South Yorkshire Pensions Authority has appointed Royal London Asset Management for a £1.75m “buy and maintain” mandate covering an estimated value of 5% of the scheme’s assets – equivalent to around £250m. The portfolio consists mainly of sterling-denominated bonds, according to the EU contract award notice.
Welsh councils in limbo over funding
Welsh councils have complained over delays which mean they still do not know their grant funding levels for 2015-16. Councils have still to receive notification of Local Transport Fund grants from the Welsh Government. Last year’s grants were announced on 12 May 2014, giving them less than a year to implement transport projects.
