Campaigners call for inquiry into council ‘toxic’ loans
Residents have raised objections against risky high-interest loans in 46 local authorities, campaigners have revealed.
Debt Resistance UK have been encouraging people to file an objection against Lender Option, Borrower Option (LOBO) loans, after an investigation revealed local authorities had taken up to £15bn in LOBO loans.
The figures published by the group show 61 LOBO loan objections have been made across 46 local authorities, covering 50% of the combined loan debt.
They are now calling on the Government to reopen the LOBO loan inquiry.
Fanny Malinen from Debt Resistance UK said: ‘Residents are increasingly concerned about the impact of LOBO borrowing to their councils’ ability to meet their civic duties and provide the services people so urgently need. This is why we are supporting residents to use their legal right to object to this irrational spending councils have been lured into by banks and advisers.
‘Resident action at the local level will not be enough if Government and regulators don’t act to stop the profiteering. There’s already a severe crisis in local authority funding following central government cuts, resulting from bailing out many of the same banks that sold councils LOBOs.
‘Instead of tackling the crisis, further deregulation of local authority finance is driving councils into the arms of private financiers and property speculators. The consequences will prove disastrous for the public purse.’