Naomi Larsson 31 October 2018

Council hits back at 'illegitimate' loan claim

Council hits back at illegitimate loan claim image

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’.

For your free daily news bulletin
Highways jobs

Social Worker - Early Interventions

Essex County Council
£32065 - £43839 per annum
Social Worker - Early Interventions Permanent, Full Time £32,065 - £43,839 per annum Location
Recuriter: Essex County Council

Social Worker - Local Linked Support Team

Essex County Council
£32065 - £43839 per annum
This is a full time fixed term contract for 12 month or a 12 month Secondment.About the RoleThis is a community-based role within the Harlow area. You England, Essex, Epping
Recuriter: Essex County Council

Property and Projects Lawyer

Brent Council
£43,860 - £49,827 p.a. inc.(pro rata)
The successful candidate will have the opportunity to supervise junior staff and deputise in the absence of the Senior Property Lawyer. Wembley, London (Greater)
Recuriter: Brent Council

Training and Quality Assurance Specialist

Essex County Council
Up to £26801 per annum
The OpportunityEssex Registration Service is one of the largest authorities in the Country, serving thousands of customers in the Registration of Bir England, Essex, Chelmsford
Recuriter: Essex County Council

Business Support Officer

Camden London Borough Council
We have recently changed the way that we work so that we are more responsive to... Camden, London (Greater)
Recuriter: Camden London Borough Council

Public Property

Latest issue - Public Property News

This issue of Public Property examines how how flexible workspaces can lead the way in regeneration for local authorities, Why local authority intervention is key to successful urban regeneration schemes and if the Government’s challenge of embracing beauty is an opportunity for communities.

The March issue also takes a closer look at Blackburn with Darwen Council's first digital health hub to help people gain control over health and care services.

Register for your free digital issue