Letter: Should the Council Be Acting As a Bank?

Published on: 9 Feb, 2018
Updated on: 9 Feb, 2018

From Ben Paton

In response to: Concerns Expressed Over Student Accommodation Loan As GBC Agrees Budget

Should the council be acting as a bank? Is the purpose of cheap Treasury loans from central government to enable the council to lend on the money to its favourites. In a modern economy with a competitive banking sector why does the university not approach a conventional lender?

Is GBC really lending at arm’s length terms? Or are its terms better than the university can achieve in the market? If they are better terms then what is the justification for making the loan on a subsidised basis?

Does this not call into question the council’s impartiality when it comes to the university, presuming the wide belief that the University of Surrey is the potential borrower is correct?

How could the council regulate the university’s building applications if it has a vested interest in those buildings by virtue of being a substantial lender to the university?

Why is a Conservative council doing this? How does this square with a Conservative tenet that the market provides a better service, because subject to competition, than government? What alternative sources of finance were considered? Will the council transparently disclose the terms agreed with the university?

There are many established sources of funds for student accommodation. So why does the council need to get involved?

Isn’t it rather odd that not a single Conservative voted against or abstained? Isn’t support for the free market a Conservative principle? Do none of them feel any discomfort that all the Labour Councillors voted in favour of the proposal? Isn’t this a good old fashioned application of national credit to try and stimulate national production? Wasn’t this tried out in the 1950s? Is it illegal state aid?

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