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Working Together Saves Money! 6 March 2006

    The Department of Local Government and the Environment and Local Authorities on the Island have recently worked together to negotiate new loan facilities with one of the Isle of Man’s leading financial institutions. This has resulted in savings which will benefit taxpayers and ratepayers in the longer term.

    In the past Local Authorities have had to negotiate the terms of any loan, on an individual basis, whereas now, following consultation between the Department, Treasury and the Local Authorities, the Isle of Man Bank has successfully tendered for the new financing arrangement.

    The amalgamation of the borrowing power of the Island’s Local Authorities, together with a guarantee provided by the Isle of Man Government, has resulted in a more favourable rate for lending being agreed. The loan facility will be used to finance major capital schemes as well as smaller rate borne projects.

    This agreement will result in the previous method of raising monies, by the issue of Bonds, which are administratively costly, being phased out by all Local Authorities.

    The new arrangement has already proved financially beneficial to a number of Local Authorities and the Department is pleased that the benefits of Central and Local Government working together are being passed onto local ratepayers.

    The Minister for Local Government and the Environment, John Rimington MHK, said

    ”The new arrangements for Local Authority borrowings represent good value for the ratepayer and also for the taxpayer as the Department funds the total deficiency on local authority housing for which most borrowing occurs. The agreed rate of interest for borrowing is 0.2% above base rate for major capital schemes. Local Authorities are still free to make their own borrowing arrangements if they wish, provided the interest rate does not exceed the negotiated rate.”

    6th March 2006

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