Responding to the news, Joel Benjamin of Debt Resistance UK said:
A CLG inquiry into LOBO
loans is great news, and vindication of the tireless FOI campaigning work put in by Debt Resistance UK volunteers. Despite being ignored for two years by Eric Pickles, slumbering financial regulators and local authorities themselves, this issue is finally being taken seriously.
Billions of pounds of taxpayer money is ultimately at stake here, and it is only right that Parliament scrutinises public sector borrowing from City of London banks and removes conflicts of interest with the unregulated financial advisors that recommend LOBOs whilst accepting undeclared kickback payments from banks and brokers.”
Jamie Griffiths also from Debt Resistance UK adds:
loans present terrible value for taxpayers despite arguments to the contrary. By extending the life of the loan and giving up the ability to repay when interest rates are low councils end up paying significantly greater sums in interest than they would by borrowing from central government. While so-called ‘independent’ auditors look the other way taxes collected by councils end up paying not for essential services but to feather the nests of bankers, brokers and advisors.
DRUK however have serious reservations about the possible scope of the inquiry and the limits of the Parliamentary Committee process to effect required change. DRUK insist the inquiry should occur in parallel with citizen pressure on local authorities and regulatory enforcement action by The FCA and SFO.Already City Watchdog The FCA are seeking to distance themselves from responsibility for this fiasco, despite being directed to investigate Treasury Management Advisors by DCLG in 2009
, yet refusing to do so.The FCA claim to lack the powers required to investigate conflicts of interest within the very firms they are supposed to regulate – with an FCA spokesperson confirming that:
Posted in Blog, Press Release
Ludovica Rogers from Debt Resistance UK continues:
We welcome news of the inquiry, but we have little faith that it will deliver the required regulatory and structural change. DRUK is calling for a UK wide audit of Local Authority debts, a thorough regulatory investigation into the systemic abuse of Local Authority finance by the financial sector and where appropriate legal and enforcement action.
We call on people and local grass-roots groups to join the campaign and start organising their own local action group. We need a localised decentralised campaign spread across the country run by citizens for citizens.
This is not a campaign against Local Government. It is a campaign to reclaim our democratic institutions from the clutches of the financial sector. We need to keep the pressure up and insist that our Local Authorities are run in the interest of their citizens and not the interests of the City of London.
Debt Resistance UK intend to submit FOI evidence to CLG Committee examining LOBO
loans, but as yet have not been called to submit information.
Debt Resistance UK are hosting an open public meeting 6:30pm tomorrow 16 July at Goldsmiths University for citizens wanting to learn more about Local Authority Debt Audits.
For press inquiries email: firstname.lastname@example.org Phone: 07543219635
Links to further information:
UK Local Authority Debt Audit website: http://lada.debtresistance.uk/
Debt Resistance UK website: http://debtresistance.uk/
Interactive map of local authority debt: bit.ly/LADAmap
What is a LOBO loan? http://bit.ly/LOBOLoan
LOBO Loans are potentially illegal http://bit.ly/DebtTrap
The conflicts of interest http://bit.ly/LADA3