A green light has been given for the creation of the first-ever London local government insurance company.
After meeting a set of tough criteria laid down by the Financial Services Authority, the London Authorities' Mutual Limited is now open for business.
It has been established with funding from the London Regional Centre of Excellence (LRCE) and is open to all 32 London boroughs, the Corporation of London and the Greater London Authority.
The move comes in response to concerns about the very limited number of local government insurance providers and the difficulties councils face achieving best value in their premiums. The mutual aims to bring down the cost of premiums and forms part of the government's wider efficiency drive for local government.
Commenting on the new structure, the LRCE said it is too early to be precise about the amount of savings the company will generate for the participating authorities. However, independent consultants estimate that savings on insurance premiums in the region of £6m a year could be delivered. The bulk of the London boroughs have major insurance agreements that expire within the next two years.
Ken Cole, director of the London Regional Centre of Excellence, said: “This is a rare opportunity to create and shape an organisation to meet the needs of its customers. Local government has a duty to provide best value and I'm convinced that this company will provide a much better deal for local government than we have seen to date."
