Laura Sharman 07 July 2015

Betts calls for inquiry into ‘outrageous’ LOBO loans

Betts calls for inquiry into ‘outrageous’ LOBO loans image

An inquiry into how councils were sold £15bn of high interest loans could be launched, following last night’s documentary from Channel 4 Dispatches.

The programme - How councils blow your millions - revealed that around 240 local authorities have taken up to £15bn in Lender Option Borrower Option (LOBO) loans from private banks, which charge interest rates of more than 7% in some cases.

Expensive exit fees have stopped councils from moving to a better deal, which can often run for up to 70 years.

Clive Betts, chair of the Communities and Local Government Committee, is now calling for an inquiry into the loans after hearing private banks made more than £1bn in upfront profits from these loans. He also said it was ‘outrageous’ that some council advisers earned commission if town halls took out one of these risky loans.

He told the programme: ‘In the end a council appoints and pays for an independent outside advisor to come in they expect that advice to be independent and not to be paid for by somebody else who is gaining a profit from these loans being set up. I mean that really is scandalous if that's happened.’

The documentary revealed that the London Borough of Newham had the largest amount of LOBO loans at £563m, and was paying up to 7.6% in interest rates.

Councils vs network operators? image

Councils vs network operators?

The Electronic Communications Code reduces red tape, but in doing so it cuts the potential revenue property owners stand to make and risks pitting local authorities against operators. Zoe Wright reports.
Highways jobs

Air Quality Monitoring Project Manager

Birmingham City Council
£34,788 - £42,683
Seeking a skilled and dedicated individual with a background in environmental protection and air quality to... Birmingham, West Midlands
Recuriter: Birmingham City Council

Social Worker - Assessment & Intervention

Essex County Council
£22700.0 - £40750.0 per annum
In ECC we are "Serious about Social Work". Having recently won the Best Social Work Employer of the Year Award 2018 and been awarded 'Outstanding' by England, Essex, Harlow
Recuriter: Essex County Council

Social Worker - Family Support & Protection

Essex County Council
£30001.0 - £41000.0 per annum
Please note this role is based in Basildon and is open to Newly Qualified Social Workers (NQSWs). The starting salary for NQSWs is £27,775 per annum a England, Essex, Basildon
Recuriter: Essex County Council

Property Transaction Surveyor

North Yorkshire County Council
£34,788 to £38,813
We are looking for a Property Transaction Surveyor to join our growing Property Service North Yorkshire
Recuriter: North Yorkshire County Council

Workplace Manager

North Yorkshire County Council
£42,683 to £46,503
We are seeking a Workplace Manager to join our growing Property Service. North Yorkshire
Recuriter: North Yorkshire County Council

Local Government News

Latest issue - Local Goverrnemnt News

This issue of Local Government News explores how councils can tackle modern slavery and trafficking in their supply chains, finds out more about Cambridge's first cohousing scheme and the launch of a new project to build a shared service pattern library for local government.

This issue also contains a special focus on children's services and how councils are protecting children following local safeguarding children boards being abolished.

Register for your free magazine