Laura Sharman 07 May 2019

Council to save £143m after ending LOBO loan

Newham Council is set to £143m after successfully terminating its Lender Option Borrower Option (LOBO) loans with NatWest bank.

The agreement will allow the council - which took out six LOBO loans with the bank in 2009 - to pay off the loans at a considerably lower rate of interest.

The mayor of Newham, Rokhsana Fiaz, said: 'Over the past ten years that the loans have been in place, it’s cost us an extra £31m in interest payments compared to borrowing from the PWLB. That’s money that should have been spent on Newham residents.

'Earlier this year, I made a promise to Newham residents that I’d make every penny count and that’s why this council filed a claim against the bank in the High Court in February. The deal that we’ve successfully nailed down today means that we’ll be saving up to £143m for Newham residents, which is a successful resolution of this litigation.'

In 2015, the Channel 4 Dispatches programme found that around 240 local authorities have taken up to £15bn in LOBO loans from private banks, which charge interest rates of more than 7% in some cases.

Research published last year showed councils could save £16bn by refinancing LOBO loans.

SIGN UP
For your free daily news bulletin
Highways jobs

Supervisor (Relief) - Christian Head Residential Care Home WMF1081e

Westmorland and Furness Council
£35,745 - £36,648
We are looking for kind, compassionate candidates interested in the opportunity to make a real difference Cumbria
Recuriter: Westmorland and Furness Council

Governance Support Officer

City of York Council
Grade 6 Level 1- 4 (£26,224 to £28,725 per annum) reduced pro rata
Are you super-organised and looking for a part-time, flexible role, working term time only with a mix of office and home working? York, North Yorkshire
Recuriter: City of York Council

Customer Service Representatives

City of York Council
Grade 5 Level 1 - 4 (24,629 - £25,779 pro rata per annum)
Are you an amazing retail, tourism or contact centre worker with excellent customer service skills. York, North Yorkshire
Recuriter: City of York Council

Care Enabler

Rotherham Metropolitan Borough Council
£23,893 pro rata (Pay award pending)
Do you want to help people maintain and increase their independence also have control over their lives? Rotherham, South Yorkshire
Recuriter: Rotherham Metropolitan Borough Council

Programme Manager WMF1082e

Westmorland and Furness Council
£62,273 to £65,017
This is an exciting opportunity to join the Westmorland and Furness Programme Management Office Cumbria / Various
Recuriter: Westmorland and Furness Council
Linkedin Banner

Partner Content

Circular highways is a necessity not an aspiration – and it’s within our grasp

Shell is helping power the journey towards a circular paving industry with Shell Bitumen LT R, a new product for roads that uses plastics destined for landfill as part of the additives to make the bitumen.

Support from Effective Energy Group for Local Authorities to Deliver £430m Sustainable Warmth Funded Energy Efficiency Projects

Effective Energy Group is now offering its support to the 40 Local Authorities who have received a share of the £430m to deliver their projects on the ground by surveying properties and installing measures.

Pay.UK – the next step in Bacs’ evolution

Dougie Belmore explains how one of the main interfaces between you and Bacs is about to change.