Local Authority finance is unregulated by the Financial Conduct Authority (FCA) and the Prudential Regulatory Authority (PRA). Documents regarding borrowing from private banks are not available to the public whilst auditing is outsourced to the panel auditors of the banks, the big four accounting firms.
Currently, Local Government finance is completely unregulated by the Financial Conduct Authority (FCA) and Prudential Regulatory Authority (PRA). However Local Authorities are considered to be “sophisticated” borrowers according by the FCA. This means that Councils are expected to hold the necessary experience and knowledge to fully understand complex financial risks when borrowing and investing public funds.
Since the Local Government Audit Commission ceased to exist as of March 31 2015 (a result of Eric Pickles austerity cuts), no effective scrutiny of Council financial decisions by Government exists. The Audit Commission was the only independent government body directly responsible for scrutinising council spending activities.
Audit work will now be undertaken by the National Audit Office and primarily the big 4 accountancy firms (Deloitte, EY, PwC, KPMG) who have proven countless times to act in the interests of their City of London, fee paying clients, rather than the taxpaying public.
LOBO loan contracts are not publicly available without making FOIA requests. All public borrowing decisions should be transparent and presented in a way that is easily understood, especially when borrowing via private institutions.