Council seeks clarity over use of derivatives

摘要

Lancashire CC will ask the Department for Communities and Local Government (DCLG) for clarity over to what extent it is legal for councils to use derivatives. The use of derivatives by councils has been controversial since a 1991 House of Lords ruling effectively banned the practice though the Localism Act 2011 opened up the possibility of it being considered lawful again. Written evidence submitted to the communities and local government committee by campaign group Debt Resistance UK last month said it was 'unacceptable' that neither the DCLG, Financial Conduct Authority, Chartered Institute of Public Finance and Accountancy nor the Local Government Association had an 'accurate handle' on the extent of derivative use by local government nor the 'scale of potential risks and costs'.