Naomi Larsson 31 October 2018

Council hits back at 'illegitimate' loan claim

Newham LBC has denied claims that decisions to enter into controversial high-interest loans were illegitimate.

A report from campaign group Research for Action suggested the council’s debt incurred by Lender Option Borrower Option (LOBO) loans was illegitimate and some loans were illegal.

In 2015 it was revealed 240 councils had taken out £15bn in high-interest LOBO loans, with claims that local government officers did not understand the risks involved.

Fanny Malinen, of Research for Action, said: ‘Every year millions of pounds are flowing into the financial sector to service loans that councils were tricked into.’

However, a spokesman for Newham, which has the most bank debt of all UK local authorities, said: ‘Decisions taken at the time to enter into these loans were legal and not illegitimate as the report suggests, but this administration has serious concerns regarding the mis-selling of LOBO loans and manipulation of the London Interbank Offered Rate (LIBOR) rate by Barclays and potentially other banks.’

Newham added the Chartered Institute of Public Finance and Accountancy (CIPFA) was ‘looking at ensuring the council’s budget is robust and how the council can increase transparency and accountability, including ensuring members are even more involved in decision making’.

SIGN UP
For your free daily news bulletin
Highways jobs

Chief Executive

Ebbsfleet Development Corporation
up to £165,000
Ebbsfleet is one of the UK’s most ambitious regeneration projects, a 21st-century Garden City Ebbsfleet, Kent
Recuriter: Ebbsfleet Development Corporation

Virtual School Inclusion Support Officer

Essex County Council
£32768.0000 - £38550.0000 per annum
Virtual School Inclusion Support OfficerPermanent, Term Time£32,768 to £38,550 per annum (full time equivalent)Location
Recuriter: Essex County Council

Senior Business Development Officer

Essex County Council
£36341.0000 - £42754.0000 per annum
Senior Business Development Officer - Integrated Passenger Transport UnitFixed Term, Full Time£36,341 to £42,754 per annumLocation
Recuriter: Essex County Council

Adults Social Worker - Neighbourhood Team

Essex County Council
£37185 - £50081 per annum + Flexible Working, Hybrid Working
Interview dates
Recuriter: Essex County Council

Investment Marketing and Web Officer CDC

City Of Doncaster Council
Grade 8, £33,708 - £37,399
The postholder should be experienced in planning social media activity, refreshing web content and analysing their impact. Doncaster, South Yorkshire
Recuriter: City Of Doncaster Council
Linkedin Banner