A Better Deal for Newham’s Taxpayers

Newham Green Party are thrilled to see action following our 2 year campaign against Newham’s LOBO loans

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We are thrilled by Newham Council’s announcement that Barclays are turning 55% of its Lender Option Borrower Option, or LOBO, loans (worth £248 million) into a normal fixed-rate loan. It is estimated that this deal will save Newham Council £1.6 million this coming year!

The move follows years of campaigning by our team, alongside Debt Resistance UK and members of the public who uncovered the toxic debt, totaling 90% of the council’s debt portfolio. The interest payments alone equal 80% of Council tax paid from 2014 to 2015.

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Debt Resistance UK’s profile of Newham

We are excited to finally see positive movement on this issue. This should rescue us from over a million pounds of cuts to local services and jobs this year. Newham taxpayers’ deserve to see their money spent on local services, not bank debts from mis-sold financial products.

However, we are concerned that the other 45% of the council’s LOBO loans remain unchallenged, and that full details of this new deal with Barclays have not been released. We can’t be sure that this announcement isn’t just a rewording of last year’s changes initiated by Barclays for all of their LOBOs contracts in the UK.

Rachel Collinson, Membership Officer of Newham Green Party, and Elisabeth Whitebread, the Green Party candidate in the 2016 Forest Gate North by-election, have worked closely with Debt Resistance UK since investigations started in 2014.

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Speaking on behalf of Newham Green Party, Rachel Collinson said “This is a brilliant first step to reduce Newham’s debt problems. However, we will continue to campaign for further action to reduce debt expenditure from the LOBO investments with RBS.
Residents, local businesses and Council workers should not be penalised for these banks mis-selling loans to councils.”

Newham Green Party’s campaign started in 2014, following discussions with Joel Benjamin of Debt Resistance about investigating Newham’s LOBO loans.
In 2015 Ms Collinson submitted letters to Newham Council regarding the LOBO loan debt, with little in the way of constructive response. This was followed with a request to the auditors to take the Council to court over illegal spending.
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In 2016 Green Party and Debt Resistance activists attended various Council meetings; providing investigation reports, and offers of no win, no fee legal advice to provide the council with a low cost solution.

In addition to the nearly 900 people who signed our petition, we would like to thank all our volunteers, members and supporters, and Newham Councillors Rokhsana Fiaz, John Gray and John Whitworth for their input and questions at some of the Council and audit meetings – often against strong resistance from other Newham Councillors.

In an email to their supporters, Ludovica Rogers of Debt Resistance UK said:

We hope this deal goes beyond a simple PR stunt for Barclays and Newham council and that risk and high costs for taxpayers associated with LOBO loans are being effectively removed. Until Newham Council put the terms of this deal negotiated in secret into the public realm, we can’t comment, in particular on loan breakage costs, interest rates and loan restructuring fees.

Debt Resistance UK would like to thank the hundreds of Newham residents who have signed the LOBOs petition and kept up public pressure on Robin Wales administration, alongside efforts of Newham LOBO loan objector Rachel Collinson

They join us in our disappointment at the poor conduct of Finance Director Lester Hudson and Mayor Robin Wales – “whose financial competence must now be called into direct question.”

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Cllr Hudson speaks at Council Meeting, July 2016. Photo by Debt Resistance UK

We will continue to work with the brilliant Debt Resistance UK team on monitoring the council’s new deal and how the savings are put to use.

Please get in touch if you’d like to join this campaign, and sign the petition to continue the pressure on the remaining RBS loans.

Let’s clean up Newham!

Help us get our council taxes paying for much needed services, not paying interest to banks

So you may have heard by now that there is a by-election coming up in Forest Gate North.

FGN bannerWhile I’ve been going round talking to local residents about what we can do to help them, I hear time and time again about environmental concerns: fly-tipping, rubbish on the streets, and dog mess.

If elected, I would prioritise solving these problems. However, some of them come down to one thing: money. And we all know how this Conservative government has tightened the screws on the most disadvantaged boroughs in the country. Newham is high up on that list.

Sir Robin Wales has been spreading the news everywhere that we have to save £50 million a year from now on; potentially even more after the economic disaster of last week. So Labour in this area have been quietly getting on with privatising one public service after another. So far this includes:

  • Council housing (Red Doors);
  • Administration (OneSource);
  • Supplies to council services (NewCo);
  • Waste collection (East London Waste Authority);
  • Language and translation services (Newham Language Shop);
  • Schools (academisation across the borough)

…and worse is to come as more savings need to be found. (Here’s an excellent blog by councillor John Gray of West Ham on his concerns over the increasing privatisation of council services).

However, Newham Greens have a plan to raise the money we need without privatising one more service. It can get us the extra money we need to stop fly-tipping, and improve street maintenance, as well as reopening Sure Start centres and community centres!uk-pwlb-vs-lobo-debt

How?!
Throughout the 2000s, our Labour council took out over £500million in loans (called LOBOs) from private banks. They were a very bad deal. And now we are paying the equivalent of 80% of our council tax in interest each year. How much does that work out at? Surprise: £50 million!

Our legal advisers say that Newham’s mayor, Sir Robin Wales, could put a stop to all this by taking the banks to court for mis-selling, just like we can do with PPI.

Help us get our money back from the banks by signing this petition.

If you support our efforts and live in the the ward, please make sure to vote Green on the 14th July.

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