Councils Demand Risk-Free Borrowing

Councils are holding detailed talks with the Treasury in a bid to prevent them falling foul of movements in the money markets when they raid government coffers for loans next month. The talks between the Local Government Association and Treasury officials centre on councils’ desire to borrow money based on a three-month average price of gilts - the price of government borrowing. Whitehall’s proposal, which councils fear could prove disastrous, would see the borrowing based on the price of gilts on a single day - 26 March - leaving them at risk of higher interest payments if prices rise in the days beforehand. Read more on Inside Housing.