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Minority of councils shun cheaper borrowing

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The vast majority of councils have won access to a cheaper government loan rate after submitting their borrowing and investment plans.

All but 45 local authorities in England, Scotland and Wales have been told they will be able to borrow at the Public Work Loans Board’s new ‘certainty rate’ which has been set at 20 basis points below the ‘standard rate’.

The rate, available from the start of this month, was first set out by the chancellor in this year’s budget. It requires councils to submit three-year plans of their borrowing, capital expenditure and debt financing on an annual basis each September.

The 45 authorities not on the list include five London boroughs and another 40 district councils who are all understood not to have submitted the information - see table below. A Treasury spokesman said all councils which had submitted the additional information had been succesful in their application.

Mark Horsfield, director of Arlingclose treasury advisers, said many of the 45 councils not on the list were debt free or had no medium-term plans to borrow. However, he said some councils in a similar situation had decided to apply in case their situation changed. “Some of our debt-free clients completed the Certainty Form with zeros as they wanted the flexibility to be able to borrow from the PWLB at the Certainty Rate if there was a material change in their financial circumstances,” he said.

A spokesman for Hammersmith & Fulham LBC said: “As we have no immediate plans to borrow money we did not apply to be on the list. In future years we may, and can, join if there is a borrowing need.”

A third “further reduced rate” was also mooted in the Budget, involving an “independent body” and available to “authorities demonstrating best quality and value for money”.

However, further information about this rate – since dubbed the ‘scrutiny rate’ – have yet to be released and previous Treasury suggestions that more information would come in the Autumn statement are now less certain, according to a departmental spokesman.

View the Treasury list of public bodies granted access to the ‘certainty rate’.

DID NOT APPLY FOR CERTAINTY RATE
Basingstoke & Deane BC
Boston DC
Bracknell Forest Council
Breckland DC
Bromley LBC
Broxbourne BC
Chelmsford City Council
Chichester DC
Chiltern DC
Cotswold DC
Daventry DC
Douglas BC
East Cambridgeshire DC
East Hampshire DC
East Hertfordshire DC
Epping Forest DC
Erewash BC
Exeter City Council
Fenland DC
Forest of Dean DC
Hammersmith & Fulham LBC
Harlow DC
Hart DC
Havant BC
Kensington & Chelsea RBC
Maldon DC
Mendip DC
Mid Devon DC
Mid Sussex DC
Purbeck DC
Rushcliffe BC
Rushmoor BC
Sevenoaks DC
Shetland Islands Council
South Buckinghamshire DC
South Kestevan DC
South Oxfordshire DC
Spelthorne BC
St Edmundsbury BC
Tewkesbury BC
Wandsworth LBC
Waverley BC
Wellingborough BC
Windsor & Maidenhead RBC
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