15 October 2019The 1% increase to the Public Works Loan Board (PWLB) rate will cost councils £70m a year, town hall chiefs have warned.
In a letter to chief finance officers, the Treasury hiked the interest rate charged on loans to local authorities by one percent, taking the interest rate from 1.8% to 2.8% with immediate effect. The Local Government Association (LGA) warned the increase will significantly increase the cost of borrowing for councils and put capital schemes at risk.
The new rates do not apply to existing PWLB loans which give certainty as to the payments to be made
