By Richard Johnstone | 22 January 2015
Former Local Government Association chair Sir Merrick Cockell will lead the new municipal bonds agency that is being formed to lend money to councils.
Cockell was today named as the chair of the Local Capital Finance Company, which is being formed by the LGA in a bid to provide cheaper borrowing to town halls than the Public Works Loan Board. It has been estimated the agency could cut borrowing costs by nearly £1.5bn over 30 years through issuing municipal bonds and then lending this money to councils at lower interest rates than the PWLB.
The first bond issue is expected this year, and it was also announced today that Adrian Bell, formally chair of the European arm of the Royal Bank of Canada and currently head of UK debt markets for wealth management firm Canaccord Genuity, will be vice chair of LCFC.
Cockell, who was LGA chair when the agency was being developed, said he was delighted to have the opportunity to head up the agency.
‘I have long been an enthusiastic supporter of creating a thriving municipal bonds market in the UK,’ he added.
‘Councils should not have to form an orderly queue at the door of the Treasury to ask for permission to finance their projects. The bonds agency can be a showcase for local government at its innovative best – standing on its own financial feet, asserting its independence and working together to get a better deal for its residents.’
Confirming the two appointments, LGA executive director Michael Lockwood said: ‘Securing Sir Merrick and Adrian is a major coup for the agency. They bring a wealth of experience and expertise in local government, business and finance. Having them lead this agency will be crucial to making this a success.’
