The cost of council borrowing could rise by 25% as a result of an interest rate hike at the Public Works Loan Board (PWLB), the LGA has warned.

LGA director of finance, Stephen Jones, has estimated that the-near 1% hike in PWLB interest rates announced as part of last week's Comprehensive Spending Review (CSR) would force significant new costs on to the sector at a time when councils faced total grant cuts of around 27%.