Who has taken out LOBOs?

The Freedom of Information Act 2000 gives people the right to access information held by Councils and other public bodies. All Councils must comply with requests for the information they hold, unless an exemption from disclosure applies.

DRUK sent FOI requests to over 250 UK local authorities in an attempt to obtain LOBO loan agreements and gain a complete picture of UK local authority LOBO debt. This includes all those Local Authorities where  the DCLG Borrowing and Investment Live Tables indicate large long term liabilities to UK banks. It also includes Local Authorities who are not borrowing from UK banks but from ‘other sources.’

The request took the following form:

  1. How many Lender Option Borrower Option (LOBOs) contracts do you have on your books?
  2. When were they signed? and by whom?
  3. With which financial institutions were they taken out?
  4. Who advised the council to enter the LOBO(s)?
  5. Since each Contract has been signed, has the lender exercised their option and changed the interest rate?
  6. If so, please specify the dates of the interest rate changes and the revised interest rates.
  7. Please provide a copy of the original, signed LOBO agreement.

We later amended question 4 in order to obtain the names of the brokers who arranged the loans:

  1. Who advised the council to enter the LOBO(s) and which brokerage firms did the council use to arrange them?

We used the FOI platform WhatDoTheyKnow (WDTK) to send the FOI requests to local authorities as it offer certain advantages:

  • it has an up-to-date database of local authority FOI email addresses
  • it sends alert emails to notify users of responses to their FOI requests
  • it allows tracking of the status of the request based on user feedback
  • it publishes results of entire correspondence chains of FOI request making them publicly available to all.
  • it provides an API that allow users to automate some of the work

Local authorities have a statutory 20 working day limit in which to respond to FOI requests though this limit may be extended in certain circumstances. The response from local authorities to the LOBO loan FOI requests has varied considerably with some Councils responding well within the statutory period and others dragging their heels or refusing to provide information.

If a person making an FOI request is dissatisfied with the response they receive from an authority have two statutory courses of appeal. The first is to ask the authority to conduct an internal review of their handling of the FOI request. If this upholds the Council’s original decision, or if the person making the request still feels the response is insufficient, they can appeal to the Information Commissioner’s Office (or, in Scotland, the Scottish Information Commissioner).

Many Councils have attempted to argue that divulging details of the LOBO loan contracts are exempt from disclosure under the Freedom of Information Act 2000. In Appendix 1 is a list of the exemptions that have been used to try to obscure the details of LOBO loan agreements and the arguments that we have presented when requesting internal reviews to overturn the exemptions.

We are currently in the process of elaborating the data we have received and plan to publish some of the findings in the near future.