Dear friends of Research for Action,
Here are our latest news! We have a busy April coming up full of events and great news to share about banks winding down LOBO loans.
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IN THE NEWS
RBS restructures LOBO loans
In March, the Guardian reported that the Royal Bank of Scotland (RBS) is working to wind down its LOBO loan portfolio worth £1bn, by the end of the year. It is allowing councils to exit their loans early, sometimes even offering discounts. Most councils are paying back the loans by borrowing from central government via the PWLB at rates between 2% and 3%.
This is an important victory. Prohibitive exit fees that leave councils locked into the loans for many decades are among the problems we have highlighted about LOBO loans. According to our investigation the following councils have already exited their loans with RBS: Birmingham, Bolton, Brent, Cornwall, Cornwall, Croydon, East Sussex, Gateshead, Hampshire, Harrow, Hertfordshire, Hounslow, Kent County Council, Luton, Newcastle, Northamptonshire, Salford, Shieffied. The story was also reported by CityAM and Public Sector Executive.
Statutory override in Edinburgh
Research for Action is investigating in collaboration with local organisations and residents the role that central government departments are playing in addressing LOBO loans. In March, Common Space published the first chapter of this story.
Edinburgh, one of the councils with the most toxic “inverse floater” LOBO loans from RBS, has not applied international accounting standards to their accounts. This has been enabled by a mechanism called “statutory override”, where, central government (in this case the Scottish government) and the CIPFA/LAASAC codes allow local authorities to waive compliance of their annual accounts with International Financial Reporting Standards for five years. We will be revealing more on this issue in the coming months.
BBC World Tonight
Eight councils’ legal case against Barclays and RBS on LOBO Loans made the news on BBC World Tonight 20 March. The programme visited Sheffield, which is party to the court case, to talk about budget cuts and LOBO loans. They also spoke to Rachel Collinson, a local campaigner from Newham, London, and derivatives expert Abhishek Sachdev. Listen here from 27 minutes.
Local Government Elections
On 2 May, 270 councils in England and 11 in Northern Ireland will hold local elections. Also six directly elected mayors will be elected. Many of these councils have LOBO loans, so elections are an important opportunity to raise issues about the management of public funds in the public interest and the lack of accountability in local government. Get in touch if you would like to contact your councillor candidates or are running in the elections and want more information about your local authority’s LOBO loans.
National Audit Office consultation on audit practice
The NAO has launched a consultation on the Code of Audit Practice. This sets out what local auditors of relevant local public bodies are required to do to fulfill their statutory responsibilities under the Local Audit and Accountability Act 2014. You can read more about the Code and what the consultationcovers on their website.
This is an important opportunity to highlight the inadequacy of the local government audit framework and we will make a submission. If you would like to feed in experiences from interaction with your local auditor, for example through the inspection or objection process enabled by the Local Audit and Accountability Act, please do get in touch.
Municipalism 2019: An International Exchange
4-5 April 2019, Leicester
The Centre for Urban Research on Austerity (CURA) at De Montfort University, Leicester, is hosting a two-day conference on New Municipalism. It is an international event in collaboration with University of Girona and the Betiko Foundation, and includes discussing the concept of New Municipalism as well as roundtables where experiences and reflections on how to deliver municipalism are shared. Fanny will be speaking on Friday about our work on the citizen debt audit.
Finance Capital & the Ghosts of Empire: Revisiting Colonial Debts, Extractive Nostalgias, Imperial Insolvencies
5-6 April 2019, University of Sussex
This two-day event will bring together scholars, artists and activists working in different fields to explore the role of the Empire in configuration of international financial markets and the role of finance, debt and speculation in the colonial and neocolonial project. It is organised by the Centre for Global Political Economy & Centre for Colonial and Postcolonial Studies, University of Sussex in collaboration with the Reimagining Value Action Lab, Lakehead University (Canada). Joel and Fanny will be speaking about our financial activism on Saturday as part of the panel “Making Finance & the Afterlives of Empire Visible”.
25-28 April 2019, Vancouver, Canada
Vica and Joel are heading to Vancouver to a gathering of scholars, activists and artists to discuss legacies and currents of race, colonialism and empire in past and present debt regimes. The event Digital/Debt/Empire consists of panel discussions, workshops and a series of blog interventions around the themes of debt, digital and empire – and of course networking with debt scholars and activists around the world.
Newham Civil Society Youth Commission final hearing
3 April 2019
We have been working together with many civil society organisations in East London on a project that seeks solutions to the epidemic of youth crime in Newham. The Commission has been organised by Newham Citizens (TELCO), an alliance of 21 civil society institutions who act together for the common good and uses the method of community organising to find solutions to issues their members care about. The Commission has learned from hundreds of young people and parents through a listening campaign in Newham, and brought those stories to Commission hearings. The final hearing on 3 April published a set of recommendations (which we helped to write) to Newham Council, the Police, and Newham Citizens member institutions.
FROM OUR NETWORKS
Should We Abolish Household Debts? Book launch
2 May 2019, London
Dr. Johnna Montgomerie’s new book “Should We Abolish Household Debts?” argues that abolishing household debt will create economic renewal by ending the zombie economy created by debt-driven austerity. It will be launched on Thursday 2 May with a conversation between the author and other critical economists Steve Keen, Ann Pettifor and Joe Spooner. Register here.
Jubilee Debt Campaign is recruiting
Jubilee Debt Campaign is recruiting a Head of Campaigns and Engagement to lead a growing team of debt justice campaigners. JDC campaign on debt issues from the UK to the global South and have helped secure debt write-offs for poor countries in the past. Read more on their website.
BankJob is getting ready to blow up debt
The artist-activists at BankJob are preparing for their Big Bang – an explosion of debt! They have sold handmade bonds to buy payday debt in their local area in London, Walthamstow, and in March they wrote off £1.2m high-interest predatory debt in what we believe to be the first political debt write-off in the UK. All bondholders can attend the explosion, and you can buy bonds from BankJob’s website.