Council gets triple A credit rating

By on 11/10/2011 in News

Credit ratings for Birmingham City Council have been officially published for the first time today (October 11) - underlining the authority's strong financial standing and management.

Moody's Credit Rating Agency has given the City Council a triple A credit rating, the best possible rating which it provides. Standard and Poor's Rating Agency has rated the City Council at AA+.

Cllr Mike Whitby, Leader of the Council, said: “As Leader of the largest local authority in the UK, with an annual budget of £3.5billion, and an authority which has balanced its budget year-on-year since 2005, I am delighted that the rating agencies have confirmed the strong financial position of the City Council.

“There will be many large organisations that will be envious of this recognition we have received, who will perhaps themselves be unable to achieve a 'AAA' rating.

“We understand that the challenge facing the Public Sector is to be as innovative as possible when it comes to financing priorities. The ratings we have received today will enable Birmingham City Council to access a wider range of sources of finance - if we wish to in the future - at the best possible interest rates.

“We have expended a tremendous amount of effort into injecting financial discipline and ensuring our finances are stable, because we take our role as the custodian of the public purse seriously.”

Currently, the council relies predominantly on the Public Works Loan Board when borrowing money, typically to fund projects such as improved council houses, roads and leisure facilities.

However, the Government has increased the interest rates at which it will lend to local authorities, so the option of borrowing from the market using credit ratings from the likes of Moody's and Standard and Poor could avoid significant cost increases for the council in future.

Cllr Whitby added: “We are committed to improving public services in a strategic and financially-prudent way. These announcements offer us a platform from which to drive forward Birmingham and Birmingham City Council, while getting best value for the taxpayer in the process.”

Birmingham City Council is one of just a small number of public sector bodies to have ratings from Moody's and Standard and Poor’s, including Kensington & Chelsea Council, Cornwall County Council and Transport for London.

Adam Hudson of HSBC bank, appointed to advise the council during the credit rating process, said: “HSBC is pleased to have worked with Birmingham in achieving these very strong credit ratings, which we believe are both reflective of the importance of the region within the UK and the strength and depth of the council’s management team.

“HSBC has a long history in the Midlands and supporting Birmingham City Council on this important project demonstrates our continuing commitment to the region.”

ENDS

For more information contact Kris Kowalewski on 0121 303 3621

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