Annal Nayyar reports that Council bonds ‘will offer cheaper borrowing’ Public finance state Plans to establish a municipal bonds agency for local government could provide cheaper borrowing for councils than the Public Works Loan Board, an international expert has told Public Finance. Lars Andersson founded Sweden’s Kommuninvest agency, and is now helping the French government to create a similar body to issue bonds and lend to local councils. He has urged the UK Local Government Association to press ahead with establishing the scheme in England and Wales, and to seek government backing later.

Annal Nayyar  reports  that Council bonds ‘will offer cheaper borrowing’ Public finance state

Plans to establish a municipal bonds agency for local government could provide cheaper borrowing for councils than the Public Works Loan Board, an international expert has told Public Finance. Lars Andersson founded Sweden’s Kommuninvest agency, and is now helping the French government to create a similar body to issue bonds and lend to local councils. He has urged the UK Local Government Association to press ahead with establishing the scheme in England and Wales, and to seek government backing later.

Andersson predicted that demand for highly rated public sector bonds meant agencies would be able to borrow as cheaply as 60 basis points over government gilts – 20 basis points cheaper than the PWLB.

He said the LGA’s proposal, which has been in development since the government increased the PWLB rate in the 2010 Spending Review, ‘must be cheaper’ to be viable. ‘Local authorities must choose the best solution, and that is the cheapest solution,’ he added.

Both comments and pings are currently closed.

Comments are closed.