The recovery of local authority investments since the financial crisis is continuing, newly-published Government figures for 2012/13 have shown.

Statistics published by the Department for Communities and Local Government showed that total investments rose from £26.1bn at the end of March 2012 to £29.7bn a year later – a 13.8% increase.

Some 63% of these investments were held in banks or building societies – a slight increase from 62% the previous year but well down from the 84% they represented in 2008 before the Icelandic banks crisis.

There were large increases in the other securities category – partly due to a £190m hike by Lancashire CC.

The statistical release read: ‘This continued the recovery in local authority investments since the financial crisis and the £3.6bn increase was greater than the corresponding £2.3bn increase in total local authority borrowing.'

The LGA is working on plans to launch a municipal bonds agency because it is unhappy about the sector's reliance on the Public Works Loan Board, which, as in 2011/12, was responsible for three-quarters of longer-term council borrowing.

Groups such as South East England Councils have called for greater longer-term
certainty on income, which they say would allow their members to borrow more funds to take forward key projects.