Newham Council is facing legal challenges over its use of Lender Option Borrower Option (LOBO) loans. More councils around the country are coming up against criticism for choosing this type of finance. What are LOBO loans and why are there objections to them?
Devolution of UK government is once again in the media, this time in relation to the Conservatives' financial reforms. While decentralisation could eventually transform the entire political landscape, councils are currently preoccupied by Chancellor George Osborne’s announcement that local authorities will be given control over business rates. Observers disagree as to whether rate devolution offers a solution to shrinking council budgets – will the change increase revenue, or could councils see a rise in debt?
Some commentators view the devolution of fiscal authority as a rare opportunity for councils to increase income in a time of austerity. Extra cash would in theory stem from local authorities being allowed to reduce rates and attract businesses – a higher number of firms paying a slightly lower rate should be more profitable than a few companies paying more.
The prospect of business rate devolution has not, however, been welcomed unequivocally. This is mainly due to the fact that some councils could receive less cash from Whitehall under the new system, and may not be able to recoup the difference without raising rates and scaring off SMEs. Areas that are dependent on government support are less likely to have an existing business base, and the next round of devolution will force these localities to attract an initial cluster of flagship businesses in order to benefit from new powers. Financing plans such as these often requires increased borrowing, which could cause a spike in council debt with no certainty of return.
Some observers have also noted that giving councils greater responsibility for their finances may result in local authorities being treated as separate entities for credit assessment purposes. Though it's much too early to say, this could mean that councils’ credit ratings will no longer follow the UK’s sovereign rating – if a local authority receives a low credit score as a result of this 'decoupling', devolution would actually deter investment and make it difficult to find new creditors.
Dealing with uncertainty and future transformations to fiscal autonomy will be much easier if councils start from a baseline of secure cash flows and minimal debt write-off. If you work for a local authority and are concerned about what the future holds, contact a Dukes Debt Advisor to discuss how our ethical service could help.
Bailiff complaints have been the norm for some years now as poor practices are exposed by more savvy customers. But Staffordshire based enforcement company Dukes Bailiffs is bucking the trend. Final figures for 2014 compiled by auditors for the debt recovery firm shows Dukes' levels of complaints remain exceptionally low. During 2014 Dukes received just 10 customer complaints despite handling almost 29,000 cases.
“The figures are reassuring,” said Dukes MD Colin Naylor, “But there is no room for complacency. Our goal is to keep learning from any grievances we receive in order to further reduce complaint levels. We fully understand our responsibilities and appreciate that both our reputation and that of the creditor is at stake.”
Any complaints received go through a robust investigative process by an independent consultant. Dukes’ MD is informed of all bailiff complaints and progress towards a resolution is reviewed at weekly management meetings. The outcome of the investigation, and any appropriate remedy, is notified to the complainant at the earliest opportunity. No generic timescales are set as the nature of complaints can vary, but Dukes agree timescales with individual complainants and clients are then informed at every stage of the process.
Learning lessons from bailiff complaints
“Our Complaints Procedure has been developed over 23 years to ensure all genuine grievances are resolved promptly,” said Colin. “Although we have a hugely experienced team, we can still learn lessons. Handling bailiff complaints can be time consuming, but implementing corrective actions to improve any weaknesses ensures investigations are worthwhile.”
Where complainants are not satisfied with the outcome or the proposed resolution, Dukes actively encourage them to raise their concerns with the Civil Enforcement Association (CIVEA). Dukes always abide by the findings of CIVEA.
Dukes overall complaint level has fallen to 0.0003% of the total number of cases actioned. As the table below from the CIVEA demonstrates, the number of complaints received by Dukes is lower than those received by all but one of its competitors. Dukes’ data is in red, competitor data in blue.