There has been much discussion about the negative impact that October's rise in the Public Works Loan Board (PWLB) rates will have on the ability of councils to fund their much needed capital programs.  Many have publicly stated that they will either have to curtail their existing capital programmes or take funding from other discretionary sources.

 Councils have become dependent on the PWLB as the lender of first resort when its original role was to act as the lender of last resort.  Because interest rates have been relatively low for many years, councils have forgotten that PWLB rates do not represent a market determined rate of interest and can be subject to political forces.  While it may have come as a shock to the sector, it has provided an opportunity for councils to seek independence by exploring alternative funding sources available to them.