Mild Rover wrote:That isn't an additional risk, it is the passage up the chain of the same risk. If Rovers can't meet the repayments, the council will have to cover Rovers share (roughly 1/3 of the total, I believe). If the whole council goes belly up then the the rest of the country will be stiffed. It is a generous loan, I wouldn't argue with that.
By my very rough reckoning, the scale of the suffering caused by Rovers failing to make repayments would be less than £5 per head in Hull or 3p per head if it became a national problem (the latter reflecting an almost unprecendented civic crisis). Serious, but hardly catastrophic.
My point about the risk, yes it's passed up the chain. My point was mainly meaning that without this kind of loan there would have been no chance of borrowing this cash through the usual channels. That in itself shows this as more of a risky borrowing.
Breaking large figures down to cost per head always makes them seem less of a loss. The point here is that if the debt isn't repaid it means a substantial fee that could be used for doing good elsewhere has been wasted. (not for the 1st time by the government) As i said, dont think there is much chance of Rovers not meeting the repayments.
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