Local Authorities
UK’s Cash-Strapped Councils Locked Out of Crucial Funding Source
- Cash-strapped town halls hit by jitters in £12 billion market
- Tories blamed, but polls suggest problem is Labour’s to solve
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Some of Britain’s most cash-strapped town halls are being locked out of a vital source of short-term funding, foreshadowing a major financial headache awaiting the UK government after the July 4 election.
The little-known £12 billion ($15.2 billion) inter-authority lending market — where local councils borrow from each other to meet everyday cash needs — is seizing up after a spate of high-profile bankruptcies caused unsettled confidence across the sector, according to five people familiar with the matter.