LOBO Loan Authorisation and Governance
Case reference FOI2026/00374
Received 13 February 2026
Published 3 March 2026
Request
Thank you for your response dated 13 February 2026 regarding the two LOBO loans totalling £12 million.
I write to request further clarification under the Freedom of Information Act 2000 in order to understand the specific capital application and funding rationale for these borrowings.
1. Specific Capital Project Allocation
You stated that the loans were raised “to support the approved capital programme expenditure.”
Please provide:
a) A detailed schedule identifying the specific capital projects to which the £12 million (Danske £6m and Dexia £6m) was allocated.
b) The project codes, budget lines, or accounting references against which the borrowed funds were applied.
c) The total approved budget for each identified project.
d) Confirmation whether the £12 million was earmarked against defined capital schemes at the time of borrowing, or whether it was raised as general capital financing without direct project attribution.
e) Any internal reports, business cases, committee papers, or officer recommendations which identify the projects linked to these loans.
2. Capital Financing Requirement and Prudential Indicators
Please provide:
a) The Council’s Capital Financing Requirement (CFR) for the financial years 2003/04 and 2004/05.
b) The authorised borrowing limit and operational boundary approved by Full Council for those years.
c) Confirmation whether the £12 million LOBO borrowing was specifically included within those approved borrowing limits at the time of approval.
3. Consideration of Public Works Loan Board (PWLB) / Treasury Borrowing
Given that local authorities may access borrowing via the Public Works Loan Board (PWLB) / HM Treasury at standard government rates, please provide:
a) Confirmation whether the Council sought or considered PWLB borrowing for the same capital requirement before entering into LOBO agreements with private sector lenders.
b) Copies of any comparative analysis, cost modelling, or option appraisal undertaken between PWLB borrowing and LOBO borrowing.
c) The interest rate available from PWLB at the relevant dates (February 2004 and November 2004) and any documented comparison with the LOBO rates.
d) Any recorded rationale explaining why private-sector LOBO borrowing was considered preferable to Treasury/PWLB funding.
4. Revenue vs Capital Clarification
Please confirm whether any portion of the £12 million borrowed was used, directly or indirectly, to support revenue expenditure, cash-flow support, or general budget pressures rather than defined capital expenditure.
If so, please provide full details.
Response
Thank you for your response dated 13 February 2026 regarding the two LOBO loans totalling £12 million.
I write to request further clarification under the Freedom of Information Act 2000 in order to understand the specific capital application and funding rationale for these borrowings.
1. Specific Capital Project Allocation
You stated that the loans were raised “to support the approved capital programme expenditure.”
Please provide:
a) A detailed schedule identifying the specific capital projects to which the £12 million (Danske £6m and Dexia £6m) was allocated.
A: Borrowing was undertaken to support the approved capital programme expenditure. It was not allocated to specific capital projects.
b) The project codes, budget lines, or accounting references against which the borrowed funds were applied.
A: N/A
c) The total approved budget for each identified project.
A: N/A
d) Confirmation whether the £12 million was earmarked against defined capital schemes at the time of borrowing, or whether it was raised as general capital financing without direct project attribution.
A: See response to 1a.
e) Any internal reports, business cases, committee papers, or officer recommendations which identify the projects linked to these loans.
A: N/A
2. Capital Financing Requirement and Prudential Indicators
Please provide:
a) The Council’s Capital Financing Requirement (CFR) for the financial years 2003/04 and 2004/05.
A: The oldest Council meeting information held is May 2003. The 2003/04 data is included in the 2004/05 Treasury Management Strategy as a comparative.
For 2004/05, the Treasury Management Strategy is on the attached document titled ‘Appendix 5 Cabinet Report’. The capital financing requirement was:-
b) The authorised borrowing limit and operational boundary approved by Full Council for those years.
A: Please see details for 2003/04 in the first column, and 2004/05 in the second column:-
c) Confirmation whether the £12 million LOBO borrowing was specifically included within those approved borrowing limits at the time of approval.
A: This information is no longer held due to our retention schedule.
3. Consideration of Public Works Loan Board (PWLB) / Treasury Borrowing
Given that local authorities may access borrowing via the Public Works Loan Board (PWLB) / HM Treasury at standard government rates, please provide:
a) Confirmation whether the Council sought or considered PWLB borrowing for the same capital requirement before entering into LOBO agreements with private sector lenders.
b) Copies of any comparative analysis, cost modelling, or option appraisal undertaken between PWLB borrowing and LOBO borrowing.
c) The interest rate available from PWLB at the relevant dates (February 2004 and November 2004) and any documented comparison with the LOBO rates.
d) Any recorded rationale explaining why private-sector LOBO borrowing was considered preferable to Treasury/PWLB funding.
A: This information is no longer held due to our retention schedule.
4. Revenue vs Capital Clarification
Please confirm whether any portion of the £12 million borrowed was used, directly or indirectly, to support revenue expenditure, cash-flow support, or general budget pressures rather than defined capital expenditure.
If so, please provide full details.
A: See response to 1a.
Documents
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