LOBO Loans news at Wirral Council. A foreseeable and avoidable £300 million debt is hanging over Wirral council tax payers. How much of your council tax is being used to pay these off at HUGE rates of interest? How many jobs have been cut and services farmed out as a result? How many senior officers have prospered and are doing fine on the back of their own personal failure? ONE…. Mr Ian Coleman, now departed.
With all this Labour Party conference talk of Private Finance Initiative ( PFI) schemes we thought we’d turn our attention to the Local Authority (LA) equivalent of the never-never and and return to an old story concerned with LOBO loans.
For those unfamiliar with the concept -although you might not know you’re paying through the nose for one – a LOBO stands for Lender Option Borrower Option.
The Lender Option means that periodically the lender can impose a new interest rate.
The Borrower Option is to agree to new interest rate or pay loan back in full.
However if the local authority chooses to pay the loan back in full there are punitive ‘break penalties’ which can cost the local authority (and more specifically the council taxpayer) an arm and a leg.
Last night’s Audit & Risk Management Committee confirmed that Wirral Council have taken out a LOBO…
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