LOBO loans

The request was successful.

Jonathan Stevenson

Dear Newcastle upon Tyne City Council,

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 agreements.

Yours faithfully,

Jonathan Stevenson

Freedom Of Information Requests Mailbox, Newcastle upon Tyne City Council

FOI – 8565

Thank you for your request for information. We are dealing with it under the terms of the Freedom of Information Act 2000.

We have passed your request to relevant colleagues who will respond within 20 working days starting the working day after receipt of your request.

Regards
Freedom of Information Team

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Nicholson, Mark, Newcastle upon Tyne City Council

1 Attachment

Dear Mr Stevenson

Your request / our response

Please see attached.

If you are unhappy with our response to your request you can ask for an
internal review of our decision.  Please send details of your request for
review to the following address:

Information Governance Adviser

Newcastle City Council

Civic Centre
Newcastle upon Tyne
NE1 8QH

Telephone: 0191 277 7666
E-mail: [1][Newcastle City Council request email]

If you are still unhappy with how we have handled your request following
our internal review you can complain to the Information Commissioner. 
Contact details are as follows:

Information Commissioner’s Office
Wycliffe House
Water Lane
Wilmslow
Cheshire
SK9 5AF

Telephone: 0303 123 1113
E-mail: [2][email address]

Thanks

Mark Nicholson
Assistant Director - Financial Services

Direct Line: (0191) 211 5115 (internal 25115)
Mobile: (07500) 99 44 81
Fax: (0191) 211 4840

Newcastle City Council
Room 505, Civic Centre
Newcastle upon Tyne
NE1 8QH

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Jonathan Stevenson

Dear Newcastle upon Tyne City Council,

Please pass this on to the person who conducts Freedom of Information reviews.

I am writing to request an internal review of Newcastle upon Tyne City Council's handling of my FOI request 'LOBO loans'.

Firstly, your response cites a Section 41 exemption for not releasing copies of your original LOBO loan contracts. Please can you confirm which relevant third parties you have consulted in citing this exemption, whether your claimed duty of confidence is explicit or implicit, and whether you have sought legal advice for this assessment?

Ministry of Justice guidance on Section 41 (see https://www.justice.gov.uk/downloads/inf...) states that "in order to ascertain whether information supplied in confidence can be disclosed in response to a freedom of information request or is exempt under section 41, it may be necessary to consult with the information provider, affected third parties and in some cases other relevant departments, depending on the nature of the information." It also states "Whether an implied duty of confidence arises is essentially a question of law. If a public authority has not expressly agreed to keep information confidential but suspects that a duty of confidence may be implied, it will often be necessary to seek legal advice."

In addition, the MoJ guidance states that exemptions under Section 41 are subject to the public interest test and that one example of a case where there would be a public interest in disclosure is "information which shows that a particular public contract is bad value for money". I believe there is a clear public interest in being able to effectively scrutinise the council’s borrowing decisions, including by comparing LOBO loans to the cost of borrowing from the Public Works Loan Board to assess value for money. The complexity of LOBO loans means that effective scrutiny is only possible by looking at the details of the loan contract.

Secondly, your response cites a Section 43(2) exemption. Again, please confirm any named counterparties the council has consulted (including banks, advisors, and brokers) prior to citing the Section 43(2). In Derry City Council vs Information Commissioner (EA/2006/0014) it was established that to engage Section 43(2) authorities should consult any parties whose interests might be affected if the information were disclosed. Failure to obtain the views of affected third parties can invalidate the authority's reliance on the exemption.

MoJ guidance on Section 43(2) exemptions (https://www.justice.gov.uk/downloads/inf...) states that the public interest test applies and that examples of this include ensuring there is "transparency in the accountability of public funds" and that "public money is being used effectively and that departments are getting value for money when purchasing goods and services". Clearly this includes financial services like loans. Guidance issued by the Information Commissioner (https://ico.org.uk/media/for-organisatio...) also states that "Where a public authority is satisfied that the information requested is a trade secret or that its release would prejudice someone’s commercial interests, it can only refuse to provide the information if it is satisfied that the public interest in withholding the information outweighs the public interest in disclosing it. The bias is in favour of disclosure and there will be occasions where information is released even though it is a trade secret or is likely to prejudice someone’s commercial interest." Furthermore, in Dept of Health vs Information Commissioner (EA/2008/0018) it was established that Section 43(2) should not be used to result in the blanket exemption of whole contracts, rather they should be assessed section by section and the rest disclosed.

Please note that numerous local authorities - including Kent, Greenwich and Haringey - have fully responded to similar FoI requests, providing digital copies of the LOBO loan contracts. Lenders named in these contracts have included Barclays, RBS, Dexia and DEPFA.

A full history of my FOI request and all correspondence is available on the Internet at this address: https://www.whatdotheyknow.com/request/l...

Yours faithfully,

Jonathan Stevenson

Freedom Of Information Requests Mailbox, Newcastle upon Tyne City Council

Dear Mr Stevenson

I am writing to acknowledge your request for a review which we received on 9th May 2015.

We will carry out the requested review and will contact you again within 20 working days.

Regards
Freedom of Information Team

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Freedom Of Information Requests Mailbox, Newcastle upon Tyne City Council

Dear Mr Stevenson,

I am writing to inform you that our internal review will take longer than originally expected.

We will aim to complete the review as soon as possible.

Please accept our apologies and thank you for your patience

Regards
Freedom of Information Team

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Please use this email address for all replies to this request:
[FOI #256612 email]

Disclaimer: This message and any reply that you make will be published on the internet. Our privacy and copyright policies:
https://www.whatdotheyknow.com/help/offi...

If you find this service useful as an FOI officer, please ask your web manager to link to us from your organisation's FOI page.

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Duncan, Iain, Newcastle upon Tyne City Council

Dear Mr Stevenson
 
I write further to your request of a review of our decision not to provide
copies of the LOBO agreements, initially refused under paragraph 7 of our
email to you dated 1 April 2015.
 
I am very sorry for the delay in getting back to you, but I am happy to
report that we are now willing to provide the information sought and will
do so as soon as we have scanned the relevant papers, which I anticipate
will be within the next 14 days.
 
Thank you
 
Iain
 
Iain Duncan
Senior Accountant
Direct Line: (0191) 2116684 (internal 26684)
Fax (0191) 2114840
Newcastle City Council
Resources Directorate
5th Floor, Civic Centre
Newcastle upon Tyne
NE99 1RD
 
 

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Duncan, Iain, Newcastle upon Tyne City Council

1 Attachment

Dear Mr Stevenson
 
Please find enclosed a file containing the scanned loan documents for the
LOBOs belonging to Newcastle City Council
 
 
Thank you
 
Iain
 
Iain Duncan
Senior Accountant
Direct Line: (0191) 2116684 (internal 26684)
Fax (0191) 2114840
Newcastle City Council
Resources Directorate
5th Floor, Civic Centre
Newcastle upon Tyne
NE99 1RD