News Roundup: Co-op fails stress test, BGC/RP Martin deal, CFOs expect service cuts, Senior officer pay questioned

Co-op fails BofE stress test
The Co-operative Bank is the only bank to fail a stress test of the UK banking system carried out by the Bank of England. The bank’s Prudential Regulation Authority found that three of the eight participating banks – Co-operative, Lloyds Banking Group and Royal Bank of Scotland – need to strengthen their capital position. But it said that “given continuing improvements to banks’ resilience over the course of 2014 and concrete plans to build capital further going forward, only one of these banks (Co-operative Bank) was required to submit a revised capital plan”. Ratings agencies Fitch and Moody’s said that the results would not affect their current ratings for the banks.

BGC acquires RP Martin assets
Brokerage firm BGC Partners has bought the UK assets and subsidiaries of UK interdealer firm RP Martin. RP Martin generated revenues of more than £32m in the year to September 2014. A source at the firm said that staff would move to BGC’s London offices, but otherwise it would be “business as usual”. The company provides services to a number of local authorities.

New Homes Bonus benefits shire districts
Shire district councils have been the biggest winners from the introduction of the New Homes Bonus, according to a government assessment. The document said that shire counties and metropolitan districts have become slightly worse off in net financial terms, while rural authorities were slightly better off. The most negative impacts were seen in authorities in the north of England. The impact in London has been more mixed, with some of the highest positive and negative impacts. “The increasing size of the overall bonus fund and an increasing reliance on financial redistribution means there has been a shift from all authorities being better off under the policy towards a mix of around three quarters being better off and the remainder being worse off in net financial terms by 2014/15,” the report said.

CFO’s expect service cuts in 2015
Nearly half of local authority chief financial officers are uncertain about their ability to deliver services next year, according to a new survey. The poll, carried out by the Chartered Institute of Public Finance and Accountancy saw 41% of CFOs saying that they were less confident of being able to deliver services in the next financial year. This has increased from 27% last year and 20% in 2012/13.

Transparency of senior officer pay lacking, say government
The government says it will examine how it forces councils to be more open about senior officers’ pay and performance. It was responding to a recommendation by the Communities and Local Government select committee, which called for the publication of individual appraisals of officers. In its response, DCLG said more could be done to make the process “less opaque and more readily understandable to the public”. But it added: “This must be done in a way that does not impede a full and frank assessment of an individual’s performance and is in line with data protection requirements.”

Ealing to spearhead counter fraud hub
London Borough of Ealing, in partnership with London Councils, will coordinate a new fraud initiative across the capital’s local authorities. The new London Counter Fraud Hub (LCFH) will access data from each council, plus data from central government departments and commercially available sources to identify fraud. The work is being funded by a £430,400 grant from the central government.