Lancashire County Council has been deemed a very low credit risk by ratings agency Moody’s, strengthening the local authority’s capacity to access funding.
Moody’s has assigned an Aa1 rating to Lancashire County Council (LCC), which reflects a low credit risk with some susceptibility to longer-term risks.
Birmingham City Council and Cornwall Council have Aaa ratings from Moody’s, the strongest credit rating available.
The agency said the LCC rating reflects the strong institutional framework governing the UK local authority sector, the positive operating performances and debt metrics achieved by LCC over the last few years and a high likelihood of extraordinary support from the UK central government in case of need.
Thomas Amenta, a senior vice president in Moody’s sub-sovereign group and the lead analyst for LCC said: “The Comprehensive Spending Review will reduce grant funding to Lancashire by approximately £180 million over the current and the following two fiscal years.
“Although the cuts will be challenging, the council’s track record of achieving the budgeted savings is encouraging. During the last fiscal year, LCC was able to respond quickly to the £22m in-year grant funding reduction that the UK central government announced in its 2010 Emergency Budget.”
This week, James Stewart, former Infrastructure UK chief executive and now head of global infrastructure at KPMG, told CN that cities and councils will look for new finance streams, including borrowing, to make up for a shortfall of government cash.