Plans for the UK’s first municipal bonds have been green lit to launch, following a show of ‘overwhelming appetite’ from councils.
The Local Government Association (LGA) today revealed 48 town halls – including cities, counties and districts from across the political spectrum - have now signed up to become investors in the agency, which could save councils over £1bn in borrowing costs.
The LGA’s Executive has now decided there is now enough support for the agency to move into its launch phase.
Michael Lockwood, executive director of the LGA, said: ‘The decision to move into the launch phase is a significant and important step. It reflects the overwhelming appetite among local authorities for us to make this happen.
‘The response from councils has been hugely positive, and the momentum behind this exciting venture continues to build.
‘There is no doubt about the support for a local government owned bonds agency that saves taxpayers money by making borrowing cheaper. We’re now entering the crucial final leg where we will be looking for councils to finalise their equity investment.
‘This company will be owned by local government and will have the single purpose of reducing councils' long-term capital financing costs. The introduction of a council-owned competitor into the lending market can be a great showcase for local government's strength and ambition while demonstrating the very real benefits of local independence,’ he added.
