Shepway Bonds, a Good Idea?
There are no legal constraints on local authorities raising bonds, but it has not been encouraged by governments since the 1980s. However this changed when an important precedent was set whereby the Treasury authorised Transport for London (itself a local authority in legal terms) to issue £600m of bonds as part of its borrowings to improve transport infrastructure. These were snapped up by big investors.
Issuing Bonds would be a good way to overcome the shortfall in SDC’s budget. Grant Thornton the auditors of SDC state:
“ Looking further ahead the current projections produced by the Council set out a funding shortfall of £5.5 million between 2016/17 and 2020/21. The funding shortfall for 2016/17 is currently projected to be £1.7m and the Council is considering options to close this gap.”
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