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More than half of councils change financial plans after PWLB rate rise

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  • by Colin Marrs
  • in 151 News
  • — 5 Feb, 2020

The Public Works Loan Board (PWLB) interest rate rise has forced more than half of councils to alter their 2020/21 financial plans, according to a survey.

According to a poll of senior council decision makers by the Local Government Information Unit, 59% have changed tack following the Treasury’s move.

The survey said that 22% would look to borrow from an alternative source, while others are still intending to use PWLB but are scaling back their plans, the survey found.

Despite this, 87% of councils still hope to borrow from the PWLB this year, with 23% planning to use the Municipal Bonds Agency.

The survey found that 77% of respondents lack confidence in 100% business rate retention as a mechanism to fund local government

Nearly all councils (97%) plan to increase council tax in 2020/21, with 93% saying they will raise it by more than 1.5%.

In addition, nearly all councils (97%) plan to increase fees and charges in 2020/21, with some being forced to raise them ‘by the maximum possible amount’ (14%).

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