AAA for Wandsworth from Moody’s & Fitch
0Lending money to the London Borough of Wansdworth is a safer bet than lending it to the USA. That, at least, is the conclusion of Moody’s and Fitch Ratings who both announced a AAA credit rating for the London borough yesterday.
Moody’s cited the “very strong institutional framework governing the UK local authority sector” along with the “borough’s good operating performance and the absence of a structural deficit” as well as, “a very high likelihood of extraordinary support from the UK government in case of need” as their rationale for the AAA rating.
While the implied support of the UK Government seems a reasonable assumption to make where local authorities are concerned one would have to question why some of the recently downgraded UK banks, who hold vast sums of local authority deposits on their books, would not receive similar support.
In its assessment Fitch said: “The ratings reflect Wandsworth’s almost debt free position, solid record of
conservative budgeting, prudent investment policies and its financial precaution.”
It continued: “Wandsworth’s budgetary planning is prudently managed…..Comparing both operating revenue and expenditure year-on-year, Wandsworth achieved significant savings in the years when the council faced a decline in revenues.”
The council’s cabinet member for finance and corporate resources Cllr Guy Senior said: “This rating is a
clear demonstration of the strong and prudent financial management that has been a hallmark of this council for many years.
“Having a Triple A rating opens up new revenue streams to the council should we need them. If we have to raise funds for big capital investment projects like the extension of the Northern Line to Nine Elms then we would be able to at the best rates of interest.”
Estate agents of Nine Elms will be almost as happy as certain City institutions.
