A new source of funding for Liverpool

I was delighted to see that the Local Government Association issued a report to the Government this week calling for powers to enable councils to create local investment bonds to boost local growth and enterprise. This follows on from work that I initiate when I was vice chair of the LGA.

Readers of my blog will know that I have repeatedly bewailed the fact that too many decisions are made in London (or even further afield). The Government has done a lot to correct this with the announcement of new powers to councils especially for the core cities of England. But this has not moved financial power. We now have no Liverpool based bank or other financial institution. Investment decisions about Liverpool are only made in Liverpool at a very low level. The decisions are often made by people with a lofty disdain for those of us who live north of Watford.

However we do make a lot of money in Liverpool and Greater Liverpool. We pay it into pension funds, and ISAs and other financial instruments and then pop it down to London for the sharp suited investment bankers to do with as they please. This must stop.

The idea of a Liverpool bond or bonds is to create safe investment mechanisms whereby people can actually invest in their own areas. Individuals could invest, pension funds, (especially the council’s own pension fund) could invest and local companies could invest. A variety of short, medium and long term vehicles could be created which could be professionally managed and whereby loan and equity capital could be made available to businesses here at a reasonable rate because the high cost of London operations has been reduced and the decisions will be made by people who understand the local economy and its opportunities.

Whenever I have mentioned this before some people have been quite enthusiastic; others less so. But even those who were sceptical could be persuaded to put something in as a punt on a new idea.

I am not asking people to bet their house on a product like this but a lot of people and organisations might be prepared to put 5% of their savings into such a set of vehicles and that would be big money indeed.

Because that 5% could be added to direct investment in businesses from standard routes and from new ways of investing created by the new power of general competence that enables councils to do public and private sector things differently.

So let’s take our fate into our own hands. Liverpool became big and wealthy in the 19th century when local businesses used local money to do things locally, nationally and internationally. What we have done once we can do again.

And whilst I am at it this is not just about big operations. Who’s up for trying to get a Liverpool Building Society going by building on the work of some of our excellent credit unions?

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About richardkemp

Leader of the Liberal Democrats in Liverpool. UK representative on UCLG Finance Committee, Executive Bureau and World Council. Deputy Chair and Lib Dem Spokesperon on the LGA Community Wellbeing Board. Married to the lovely Cllr Erica Kemp CBE with three children and three grandchildren.
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