Laura Sharman 27 October 2021

More councils urged to exit 'toxic' LOBO debt

More councils urged to exit toxic LOBO debt image

Councils have successfully exited at least £1.6 bn from 'expensive and risky' LOBO loans, new figures have revealed.

Research for Action has published a national database of council LOBO loans, tracking the number and cost of these debts.

The LOBO loan scandal was first highlighted back in 2015, when Dispatches found that around 240 local authorities have tad up to £15bn in LOBO loans from private banks, which charge interest rates of more than 7% in some cases.

The database shows that since then, councils have exited at least £1.6bn and transformed £3.9bn into fixed-rate loans.

Ludovica Rogers, database project lead, said: 'Our new database is the first comprehensive, publicly-accessible depository of information about LOBO loans. We hope it will enable more UK councils to exit the loans, restoring public accountability and reclaiming public money for much-needed local services.'

The research shows that 95% of outstanding LOBO debt is now owed to European Banks, with councils projected to pay at least £14bn in interest payments until the loans end.

Joel Benjamin, researcher and campaigner, said: 'Our figures confirm after years of citizen-led pressure, local authorities can save millions of pounds by refinancing toxic bank debt, with low risk, low interest, loans from the Treasury PWLB.'

He added: 'A root and branch inquiry of council treasury management practice is required, to understand why borrowing and investment in the public interest appear to be the exception, not the rule?'

SIGN UP
For your free daily news bulletin
Highways jobs

Educational Psychologist - Main Grade

Essex County Council
£43483.0000 - £63394.0000 per annum
Educational Psychologist - Main GradePermanent, Full TimeSoulbury Psychologists Scale A from 3 to 8 plus SPA opportunityLocation
Recuriter: Essex County Council

Assistant Director of Family Services & Strategic Partnerships

North Northamptonshire Council
£97,632 - £108,033
Creating Brighter Futures – Where Leadership Sparks Magic North Northamptonshire
Recuriter: North Northamptonshire Council

Assistant Director – Education, SEND and Inclusion

North Northamptonshire Council
£97,632 - £108,033
Creating Brighter Futures – Where Leadership Sparks Magic North Northamptonshire
Recuriter: North Northamptonshire Council

Casual Front Of House and Events Assistant

London Borough of Richmond upon Thames and London Borough of Wandsworth
Salary From £14.28- £18.85 Depending on Skills,
Job Title
Recuriter: London Borough of Richmond upon Thames and London Borough of Wandsworth

Contracts Officer

Durham County Council
Grade 7 £30,024 to £33,699 per annum
We are looking for an individual who has excellent customer service skills to join the team for a period of 12 months. WHAT IS INVOLVED? You will be Durham
Recuriter: Durham County Council
Linkedin Banner