Congratulations for all your great actions. I’m writing as part of a researcher/activist group called Debt Resistance UK to let you know of a possible way for challenging austerity cuts on local authority level.
For the last two years, we’ve been researching local authorities’ lending from banks and found out is that hundreds of councils across Scotland, England and Wales have taken out risky and expensive loans called LOBOs. They are very problematic:
– Interest rates are up to 3 times higher than if councils borrowed from the Treasury
– Some LOBOs include derivatives, and councils are not allowed to gamble with taxpayer money. Some are also tied to LIBOR that has been rigged
– There are conflicts of interest between councils’ financial advisers and brokers of the loans
You can find more information on our website. But in short, we do not believe LOBOs are in the interests of residents of local authorities that have taken them out. This is why we campaign for residents to challenge them, and use the issue to challenge the narrative that cuts are necessary.
The Audit Commission Act enables anyone interested to inspect local authorities’ accounts during a 30 working day period, called the ‘period for the exercise of public rights.’ Councils will advertise on their website that the accounts and related documents are available to inspect – in most councils, it is now.
As a resident, you have two options for filing an objection to what you don’t believe to be in the public interest. You can:
– Request a public interest report in writing, detailing why you are objecting to LOBOs (More details here)
– Request the council’s auditor to take the legality of the loans to the high court. This is potentially a more powerful route, as you can appeal the auditor’s decision if they don’t take the matter forward (More information here)
We have supported residents in two London boroughs to file objections to their councils’ accounts and are happy to help if you’d like to object to your council’s LOBOs.