More than half of councils change financial plans after PWLB rate rise
0The 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%).
