Loan Charge Support
The purpose of loan charge support (LCS) to local authorities is to support capital investment through borrowing. The Scottish Government currently provides LCS for the following 'types' of debt:
a) pre-1999 'historic' and covenant debt;
b) joint board debt (paid to local authorities for distribution to their associated joint board);
c) 1999-2004 section 94 consent debt; and
d) new in-year supported borrowing from 2004 onwards.
LCS is made up of repayments of principle, interest and loans fund expenses for each of these debt types, and is paid as part of the Revenue Support Grant (RSG).
LCS is unhypothecated i.e. the funding is not ring-fenced for a specific purpose, and authorities are free to allocate these funds for other purposes as they see fit.
The LCS allocated to local authorities within the three year settlement 2005-06 to 2007-08 derived from methodology established during spending review 2004 (SR2004). This is described in detail in Annex 6 to Finance Circular 08/2004, issued 8 December 2004.
A review of the LCS methodology was carried out as part of the 2007 Strategic Spending Review, and the revised methodology as applied within the current three year settlement 2008-09 to 2010-11 can be found in Finance Circular No. 1/2008, issued 7 February 2008.
The calculations of Loan Charge Support for each Council, and the value of PPP/LPFS, as contained in Finance Circulars No. 1/2008 and 14/2010, can be found in the attached spreadsheet
Loan Charge Support by Council for 2008-12.
Individual local authority allocations of loan charge support and new in-year supported borrowing since 2004 can be found in the attached spreadsheet:
LCS and Supported Borrowing Allocations 2004-05 to 2010-11