Laura Sharman 23 August 2016

24 councils could face legal action over high-interest loans

Residents from 24 different local authorities have mounted legal objections to the use of the controversial high-interest Lender Option, Borrower Option (LOBO) loans by councils.

The loans came to prominence after a Channel 4 Dispatches programme revealed that around 240 local authorities had taken up to £15bn in LOBO loans from private banks, which charge interest rates of more than 7% in some cases.

An inquiry into the loans also revealed some councils had paid brokerage fees of £25,000, compared to £75 for the equivalent Public Works Loan Board (PWLB) loans.

The legal objections against LOBO loans have been lodged by residents under the 2014 Local Audit and Accountability Act over the past two months, claiming the loans are ‘irrational’ expenditure and therefore unlawful.

Researcher at Debt Resistance UK (DRUK), Joel Benjamin said: ‘UK local government finance is completely unregulated, so it’s great to see local residents around the country taking action, demanding accountability over how billions of pounds of public money is spent.

‘For the past six years, councils have been passing down savage cuts to the poorest in society, using bailiffs to violently recover debts from the working poor, claiming they have no other option.’

Debt Resistance UK says a ‘significant’ proportion of LOBO loans should be cancelled so councils can refinance at lower rates of interest. It is also calling for full transparency over how public money is being spent in the form of these loans.

SIGN UP
For your free daily news bulletin
Highways jobs

Educational Psychologist

The Royal Borough of Kensington & Chelsea Council
£57072 - £58072 per annum
We are looking for qualified and HCPC registered Educational Psychologists or Year 3 Trainee Educational Psychologists to join our thriving, progressi England, London, City of London
Recuriter: The Royal Borough of Kensington & Chelsea Council

Senior Educational Psychologist

The Royal Borough of Kensington & Chelsea Council
£66555 - £67555 per annum
As a result of internal promotions within our service we are looking for committed Senior Educational Psychologists to join us in our work to shape th England, London, City of London
Recuriter: The Royal Borough of Kensington & Chelsea Council

Principal Accountant

Durham County Council
£47,181 to £51,356 p.a. (Grade 13)
Durham County Council is the largest council in the North East, we have a budget of around £1.3 billion which helps us provide services to more than 5 Durham
Recuriter: Durham County Council

Mechanical Foreman

Durham County Council
£35,412 to £39,152 p.a. (Grade 9)
A vacancy has arisen within Building and Facilities Management for a Mechanical Foreman working full time 37 hours.   WHAT IS INVOLVED?    Within a co Durham
Recuriter: Durham County Council

Occupational Health Physiotherapist

Durham County Council
£40,777 to £45,091 p.a. (Grade 11)
An exciting opportunity has arisen with Durham County Council to join our well established ‘in house’ Occupational Health Service in making a positiv Durham
Recuriter: Durham County Council
Linkedin Banner