Cockell calls for councils to back bond agency
0Local authorities don’t need permission and must work together towards a local authority bond agency, said Sir Merrick Cockell yesterday at the LGA conference in Manchester.
Speaking to Room 151 Cockell said that the LGA saw a new bond agency existing alongside and in competition with the PWLB, providing a credible and competitive funding option for local authorities. He cited a Royal Bank of Canada report saying that a UK bond agency could issue paper with a coupon yielding 60bps over gilts. Such a yield would make the numbers stack up for local authority finance officers and councillors and would beat the current PWLB concessionary rates
Founder of the Swedish municipal bond agency Lars Andersson also spoke on the panel session. He said that the “time was right” for a UK bond agency similar to those in Scandinavia, Japan and the one being formed in France. Local authority debt being low in the UK compared to GDP creates a good backdrop for a new bond agency, Andersson said.
Discusssions are expected to get underway between the LGA and the Treasury later this year.
