Oh no it’s a LOBO!


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With all this Labour Party conference talk of Private Finance Initiative ( PFI) schemes we thought we’d turn our attention to the Local Authority (LA) equivalent of the never-never and and return to an old story concerned with LOBO loans.

LOBO-tomy Loans

For those unfamiliar with the concept -although you might not know you’re paying through the nose for one –  a LOBO stands for Lender Option Borrower Option.

The Lender Option means that periodically the lender can impose a new interest rate.

The Borrower Option is to agree to new interest rate or pay loan back in full.

However if the local authority chooses to pay the loan back in full there are punitive ‘break penalties’ which can cost the local authority (and more specifically the council taxpayer) an arm and a leg.

Last night’s Audit & Risk Management Committee confirmed that Wirral Council have taken out a LOBO loan and the reason that the annual accounts have not been fully signed off by external auditor Grant Thornton is that a member of the public has raised an objection to the LOBO loan situation.

Indeed we understand  from the excellent Debt Resistance UK website that Wirral Council is one of  46  councils that are subject to such a legal objection (see below). Full details can be read here : LOBO legal objections

LOBO Debt & “Fair (repayment) Value” for financial liabilities at 46 UK Councils where objections were lodged in 2015/16 and 2016/17 financial years.

As you can see Wirral have taken out an eyewatering  LOBO loan of £157+ million and it is estimated that they will be paying back £295 + million .  The loan repayments represent 10.2% of council tax income and debt per person on Wirral is £924 .

Furthermore latest figures Department of Communities and Local Government (DCLG) indicate that Wirral is the 13th (unlucky for us) overall highest LA borrower in the UK. No doubt part of that that is to cover pay-offs to council managers,  contracts for consultants and salaries for ‘transformers !



LOBO- tomy Loans

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Wirral Council and banks…….just think about that unholy alliance for a moment and then top up your swear box .

Apparently the people who govern us locally – again,just think about that for a moment and then order a new swear box from Amazon where you can read : “people who ordered this swear box also bought a rope and a chair”  – have been caught up in what sounds like a glorified loan shark scheme called LOBO loans to pay off council borrowing.


Now we don’t know whether it’s us and we’ve got early-onset dementia but we’re getting really confused at Leaky Towers – wasn’t there some brouhaha not so long ago about Wirral Council lending money at preferential rates to help out their mates at other Councils ?. Seems to us as though someone in the Finance Department had a LOBO-tomy when it comes to managing council finances.

Were these LOBO loans some kind of local government pyramid scheme – with the council tax paying public busting a gut lugging the bloody big stones around to enable the pharaohs (aka councillors,council managers and bankers) to get fanned with peacock feathers and bathe in asses-milk?.

We asked Council spokesperson A  – who told us:

” The loans represent good value for money.They enable Wirral Councillors and senior officers to join our friend Mr.Hamid on jaunts around the globe.They also enable us to make huge pay-offs for failure and bungs for people to keep quiet.So all things considered we think Wirral council-tax payers will be delighted that we’re squandering their money left ,right and centre…..”

Council spokesperson B  later contacted us to clarify spokesperson A ‘s statement by saying:

” We’d like to apologise for Council spokesperson A who we think has been under a lot of strain due to continuous kow-towing and therefore we’ve made a referral to our Occupational Health service – because we truly,truly care about our staff here at Wirral Council. We really,really do.

However what Council spokesperson A was going to say before they were carted off to the basement of Wallasey Town Hall never to be seen again was :

Something,something,something….we know better than you…blah,blah,blah… don’t worry about money stuff you wouldn’t understand anyway… yada yadda yadda……that’ll have to do you ,now will you please go away.”