Discount rate to begin in January
Author: Ruth Keeling, LGC |
A new discounted rate on loans from the government is set to be introduced early next year, according to officials.
The cheaper rate from the Public Works Loans Board for councils that can provide improved information on borrowing plans was unveiled in the Budget last month.
Mark Frankel, secretary of the PWLB, said it was hoped the new ?certainty rate?, 20 basis points below the PWLB’s normal rate, would be in place in January.
Mr Frankel said dates for the further discounted ?scrutiny rate? – to be made available to councils whose borrowing plans were deemed to offer value for money by an independent body – were not so clear.
The PWLB borrowing rate had been increased by 1% in 2010 due to fears over the level of local government borrowing. Treasury costings state the new rate will yield an extra 45m as councils spend the savings from lower interest payments.