01 September 2016

Barclays first bank to scrap LOBO loans

Barclays first bank to scrap LOBO loans image

Barclays has become the first bank to scrap high interest Lender Option, Borrower Option (LOBO) loans for councils.

The move will see more than 100 LOBO loans - thought to be worth around £8bn - converted into fixed-rate loans.

A spokesperson for Barclays said: ‘Under the changes Barclays is permanently waiving its 'lender option' to amend the interest rate at given periods. This will create certainty for the client for the duration of the loan, by locking in the fixed rate for its lifetime.’

Overall, around 240 local authorities have taken up to £15bn in LOBO loans from private banks, which charge interest rates of more than 7% in some cases.

To date, residents from 24 different local authorities have mounted legal objections to their use, claiming the loans are ‘irrational’ expenditure and therefore unlawful.

The spokesperson added: ‘Over a hundred local authorities and housing associations will benefit from greater certainty that their borrowing costs will not rise in future. They will also enjoy reduced break costs than there would have been had Barclays retained its right to change the interest rate. The original value they secured when taking out the loan at rates lower than those available publicly at the time, is now locked in for the lifetime of the loan.’

Unjust enrichment?  image

Unjust enrichment?

Housing authorities should take care when relying upon valuations that will feed into section 125 notices, says Amy Rogers, of the disputes team at Cripps.
Highways jobs

Head of Audit and Governance

Tamworth Borough Council
Up to £49k + £5000 shared service allowance
Looking for people who are excellent communicators, are adventurous and who are inspired by our values... Tamworth, Staffordshire
Recuriter: Tamworth Borough Council

Divisional Manager – Revenues, Benefits & Customer services

Chichester District Council
£51,354 to £55,167
We are looking for an exceptional candidate to lead the Revenues, Benefits & Customer Services division. Chichester, West Sussex
Recuriter: Chichester District Council

Senior Team Leader

Redbridge London Borough Council
£35,992 to £38,994 per annum inclusive
Looking for individuals with initiative, evidence of experience in managing a street cleansing service and motivating... Redbridge, London (Greater)
Recuriter: Redbridge London Borough Council

Residential Keyworker

London Borough of Richmond upon Thames and London Borough of Wandsworth
£19,156 per annum
This is an exciting time to join the school. In our recent OFSTED of the residential department. London (Greater)
Recuriter: London Borough of Richmond upon Thames and London Borough of Wandsworth

Commissioning Manager

Camden London Borough Council
£40,829 - £47,360 per annum
Looking for an ambitious person who can communicate well and understands how to analyse and translate qualitative and... Camden, London (Greater)
Recuriter: Camden London Borough Council

Local Government News

Latest issue - Local Goverrnemnt News

The March issue of Local Government News explores alternative funding channels that are available to councils beyond the Public Works Loan Board, what hurdles merging councils face in coming together, and how local government is handling GDPR.

This issue also has a special highways and street lighting section exploring how councils can use lighting to embark on their smart city journey and using IoT technology to weather the storm.

Register for your free magazine