Councils’ credit rating could be affected if further cuts are made local government grant funding and authorities are unwilling to reduce spending, according to ratings agency Standard and Poor’s.
In its latest review of the UK local government sector, Standard and Poor's said that while reforms were 'ongoing and in time will determine changes to their financial and operating profiles' the sector's creditworthiness 'remains strong' at least in the short term.
It noted however that councils may need to widen the scope of their financial and risk management and adopt a more long-term approach to new powers from the Localism Act.
The ratings agency currently rates Kensington and Chelsea RLB, the GLA, Transport for London, Birmingham City Council and Woking BC. Of these Kensington and Chelsea has a triple-A rating, higher than that of the French, Italian and Spanish governments.
