PEOPLE across the country have mounted legal objections to risky council borrowing from banks – which Bolton Council has been involved with.

Residents of more than 20 local authorities have raised the objections to the councils using the lender option, borrower option (LOBO) loans.

In 2015, The Bolton News revealed that Bolton Council had taken out nine of the controversial loans between 1987 and 2011, worth a value of £79 million.

Those who have mounted the objections are now calling for public interest reports by council auditors, and requesting High Court declarations that LOBO loans are “irrational” expenditure, and therefore unlawful.

In an unprecedented, nationwide action, the 24 objections lodged by residents throughout July and August under the 2014 Local Audit and Accountability Act force council auditors (PwC, KPMG, Deloitte, EY, BDO, Grant Thornton) to investigate why councils chose to take out risky, derivatives-laced loans from banks at high interest rates, when they could have borrowed directly from government, with significantly less risk.

Commenting for Debt Resistance UK (DRUK), researcher Joel Benjamin said: “UK local government finance is completely unregulated, so it’s great to see local residents around the country taking action, demanding accountability over how billions of pounds of public money is spent.”

“For the past 6 years, councils have been passing down savage cuts to the poorest in society, using bailiffs to violently recover debts from the working poor, claiming they have “no other option.”

Bolton Council has previously said that it agreed its LOBO loans “in consultation with its treasury management advisors”.