01 March 2002
A spokesman for the GLA this week admitted that the newest tier of government in the UK has been in discussions with City ratings agency Standard & Poor's.
The rating, if favourable, could be used by Mayor Ken Livingstone to attract funds from banks and finance houses as he seeks to boost cash levels at the authority. This will help fund major capital schemes across sectors such as transport and housing.
A favourable rating is likely as the strict finance conditions laid down by the government on local authorities generally means that British councils represent a good investment opportunity to the banking sector.
If the GLA goes ahead, it will become only the third British 'local authority' to obtain a credit rating and the second in the capital after the Royal Borough of Kensington and Chelsea in 2001.
Last year the mayor's transport body, Transport for London, received a rating of double-A minus.
The GLA could use its rating to bring in extra finance for specific schemes, although it would more likely end up being used to prove to potential investors the relatively low risks involved in investing in the capital.
In 2001/02 the Greater London Authority had an overall budget of £3.7bn.
The move came as the government attempted to speed up local capital projects by abolishing the national borrowing limit for parish and town councils.
The limit had been due to be scrapped in the next financial year. But on February 27 local government minister Nick Raynsford said: 'As the present national borrowing limit is exhausted, we decided to end it now rather than wait.
'This will save time for parish and town councils by allowing them to borrow the finance that they need now for their capital projects.'
PFmar2002
