WHEN you get into trouble with your finances for whatever reason, it is usually a good idea to talk to your bank manager and see if he or she can help out.
Believe it or not, banks and other financial institutions and those very professional people at Her Majesty’s Revenue and Customs will at least consider plans to repay debts in a more longer-term fashion. In other words, your reduce the amount you are paying regularly to get you over the bad times.
It may mean you pay more in the longer term, but with interest rates so low at the moment, that’s really not very damaging. What is damaging is when you are locked into a strict repayments structure that doesn’t give you any leeway.
Surely no public body these days does anything so silly. For instance, who would take out 29 so-called LOBO (lender option borrowing option) loans, with four of them owed to one bank alone for a total of £40 million that leaves the organisation facing repayments totalling £110 million at a current frankly criminal interest rate of 6.5 per cent. Yup, you’ve guessed it, the City of Edinburgh Council.
That £40m sum is piffle compared to Edinburgh Council’s overall debt, somewhere in excess of £1.6 billion, most of which is owed to the Public Works Loan Board, an organ of Her Majesty’s Treasury.
To pay for schools, new offices and, ahem, trams, the council has borrowed massively for its capital works over the last few years. The repayments and interest payments on those sums all has to be met from the council’s revenue budget, i.e. the income that the council gets from the Scottish Government, council tax and charges for parking and so on.
Better finance experts than me have calculated that the council is paying £77m in interest alone to the Treasury and banks at rates between three per cent and 6.5 per cent – yet the official Bank of England interest rate remains 0.5 per cent, a figure that has not changed since March 2009.
The council is having to cut hundreds of jobs to save £141m over the next four years, and that figure is only going to grow as the effect of the Westminster Government’s austerity policies really begins to bit.
I am not suggesting that Edinburgh Council should get special treatment, but all of Scottish local government is in crisis, and most councils are locked into debts that are owed ultimately to the Treasury and the banks.
So why doesn’t COSLA and the Scottish Government and individual councils like Edinburgh not do the simple thing and try and renegotiate these debts?
The state still owns the Royal Bank of Scotland, based at Gogarbun. Couldn’t someone have a quiet word with its approachable chief executive Ross McEwan and say: “We’ve got a problem in your home town. Is there any chance of getting an extension on our repayment terms for the LOBO loans we should never have taken in the first place?’
Could the Treasury not step in and say we understand that Scottish councils are being affected by our policies, so as a gesture of Union we’ll allow longer time to repay?
No-one is suggesting that any council default on debts, but a bit more time to pay them would be very helpful right now.
The case for the SNP’s defence
I AM just getting a bit sick of politicians trying to make political capital out of the horrendous floods across the country. Those Labour, Liberal Democrat and Tory eejits that are trying to blame the SNP for the failure of flood defence measures should think twice about doing so.
For it is fundamentally clear that the former Labour-Lib Dem Scottish Executive and the Westminster Governments of Blair, Brown and Cameron/Clegg did hee-haw to really deal with a problem they were well warned about. Google UK flood defences and you’ll see what Labour, the Lib Dems and Tories all failed to do.
Thank goodness that Hogmanay passed off safely and well, and the city was once again looking its best for global television. I am told there was no problems at Calton Hill, but I still say the decision to close it was wrong in one respect – there was no open discussion on the issue at all. Can we have one now?
It’s time you took a very long holiday, Willie
As a good SNP member, I have made it clear that I want some solid campaigning from the opposition parties at Holyrood.
I just don’t see it coming due to the sheer ineptitude of the others. There was a classic example from the Liberal Democrats yesterday.
Their leader, Willie Rennie, visited a factory in Fife and said “with Scotland returning to work today it should signal a change of focus for our parliament: it’s time to get on with the day job.”
Returning to work? If Rennie didn’t know that Monday, January 4 was a bank holiday when all public bodies, most financial institutions and a great many businesses were closed, what right does he have to even stand for parliament?
Cramond beach scrubs up nicely
MAKING an annual New Year trip to Cramond beach, albeit a day late, I couldn’t help but notice the cleanliness of the area. Well done to the local street cleansing team.