In article ,
(John Salmon) wrote:


http://www.publicfinance.co.uk/news/...nsion-plan-as-
wandsworth-gets-triple-a-ratings/?utm_source=Adestra&utm_medium=email&utm_ter
m=

By Richard Johnstone | 15 November 2011

An extension to the London underground network could be one of the
projects given the go-ahead after a London council was awarded two
top credit ratings.

The London Borough of Wandsworth, which has become the third council
in England in just over a month to get a credit rating, has been
awarded triple-A status by two agencies, Moody_s and Fitch.

The council said that the ratings were a recognition that the
authority_s financial management and budgetary control were among
_the best in the world_.

Cabinet member for finance and corporate resources Guy Senior said
that the announcement opened up new possibilities for the council,
including for any necessary borrowing to pay for a planned extension
to the Northern Line.

More than £200m has already been pledged towards the cost of the new
line between Kennington and Battersea via Nine Elms by REO, the
owners of Battersea power station.

It is planned that the project will be completed through private
sector contributions. However, Senior added that the council could
now be in a position to raise any extra necessary funds.

_If we have to raise funds for big capital investment projects like
the extension of the Northern Line to Nine Elms, then we would be
able to do at the best rates of interest,_ he said.

_Investors and lenders will be prepared to invest money into the
borough at low rates of return because they know that we are a safe
and solid bet. This means our council tax payers will be getting the
best deal available on big capital projects that [will] make
Wandsworth a better place to live._

Local authorities began to get credit rated as part of plans to issue
bonds to raise the money needed to buy out of the Housing Revenue
Account system.

It was initially thought it would be cheaper to borrow this way, to
take on a proportion of council housing debt, after the Treasury
raised the Public Works Loan Board interest rates in October
2010.However, in September the government cut the rate for HRA
borrowing from 1% above gilts to around 0.2%.

Despite this, some authorities have continued with the process of
becoming credit rated to allow them to issue bonds in the future,
potentially to pay for capital schemes such as transport projects.

Birmingham was the first to announce its rate in October 12, and on
November 3, Lancashire County Council was given an Aa1 rating.

Are Wandsworth planning to use Tax Increment Funding to repay the money I
wonder?

--
Colin Rosenstiel