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MARKET REPORT - LONDON AUTHORITY GETS AA+ CREDIT RATING

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Rating agency Standard & Poor has assigned the Greater London Authority an AA+ credit rating. ...
Rating agency Standard & Poor has assigned the Greater London Authority an AA+ credit rating.

While this reflects the authority's strong links to central government and high profile, it does not match Kensington & Chelsea LBC and Huntingdonshire DC's triple-A status.

Standard & Poor's credit analyst Robert Robinson said: 'The ratings reflect the unique structure of the GLA, its strong links with central government, its evolving role as a strategy setter for essential services in London, its influence over the functional bodies that comprise the wider GLA group and the strong level of support and control provided by the UK local government system.'

However, factors holding back the rating included the GLA's strategic influence over functional bodies like Transport for London.

This means the GLA's credit rating

is linked to TfL's credit position, performance and financial risks.

Standard & Poor also said the GLA

had a limited track record, limited financial flexibility and was not seen as essential since London had survived without a strategic authority for some time.

Mr Robinson added: 'The ratings are also underpinned by the significant controls over the GLA's activities, as set out in its statutes and powers.'

The authority has a relatively small budget of£50m and a limited ability to support other bodies through its own resources.

Mr Robinson also added: 'The

rating on the GLA reflects in part the financial risks faced by the functional bodies, in particular those faced

by TfL'

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