Local councils in England and Wales should be allowed to sell bonds to raise funds for infrastructure projects, according to the Local Government Association.
The LGA said in an e-mailed statement today that it has written to Chancellor of the Exchequer George Osborne outlining plans for bond sales to help build bridges, homes and roads. U.K. councils have higher debt ratings than some European countries and a top-rated municipal bond market would be attractive to private investors, said the LGA, which represents more than 350 councils.
“Government has taken some steps towards giving councils the tools they need to get local economies growing,” Merrick Cockell, the LGA chairman, said in the statement. “But the cuts to local authority budgets mean it is now more important than ever for the Treasury to give councils the financial autonomy they need to create jobs and bring growth to the economy.”
Osborne is seeking to bring down a budget deficit that equals 9 percent of gross domestic product by 2017 through a raft of austerity measures. The government, which has cut grants to council infrastructure budgets by almost 50 percent, should remove borrowing restrictions on councils, the LGA said today.
To contact the reporter on this story: Ben Martin in London at firstname.lastname@example.org
To contact the editor responsible for this story: Paul Armstrong at Parmstrong10@bloomberg.net