Introduction: This letter is intended to be circulated cross-party to MPs and throughout networks of local government councillors in England, Wales and Scotland in councils (at least 2o0) affected by LOBO loans. The letter is calling for action from the Local Government Association (LGA), Ministry for Housing, Communities and Local Government (MHCLG) and HM Treasury (HMT). LOBO loans are a national problem, caused by failure to adequately regulate and monitor the financial system – and to protect councils and taxpayers from mis-selling and market abuse by powerful financial firms. We are calling for a political solution so that further taxpayer... [continues]

Seven councils are suing Barclays over LOBO loans the bank sold them in years 2005 to 2008. The loans’ interest rates were pegged to LIBOR, a benchmark rate set by a group of London banks, including Barclays. In 2012 it emerged the banks had been manipulating the rate, and Barclays was fined £290m. The local authorities – Leeds, Greater Manchester Combined Authority, Newcastle, North East Lincolnshire, Nottingham, Oldham and Sheffield – allege that due to Barclays’ role in the rate rigging, the banks knew customers would rely on LIBOR rates when deciding whether to enter into contracts. The councils are... [continues]

Ten years from the financial crisis, cuts and privatisation of public services have become the new normal. Yet public sector funds are often constrained by debt repayments that have priority over everything else. This is why we need to start to ask questions: In whose interests have financial decisions been made? Who has benefitted from them, and who has paid for them? What power dynamics in society have they reinforced? A debt audit is a tool for democratising financial decision-making. Questioning the legitimacy and fairness of debt enables us to start having conversations about how public money should be used... [continues]

Research for Action is developing a citizen debt audit in the London Borough of Newham, building on the investigation by Debt Resistance UK into bank lending to local authorities in the form of risky and expensive long-term loans called LOBOs. You can find out more about LOBOs from DRUK’s Local Authority Debt Audit website. Here are the basics. What is a LOBO loan?LOBO is a long-term loan, typically 40-70 years. The acronym stands for "Lender Option Borrower Option". The lender's (bank's) option is to change the interest rate at pre-agreed call dates (e.g. once or twice a year). The borrower... [continues]