The Local Capital Finance Company is a quango and private company set up to allow local authorities to diversify funding sources and borrow at lower cost, instead of having to borrow via the Public Works Loan Board of the UK Debt Management Office, which in turn is part of HM Treasury. The official reason for the creation of the Local Capital Finance Company is that it increases competition and diversifies funding sources for local authorities, giving them greater independence. The company aims to deliver the larger, more liquid bond issues in response to capital market demand. It also provides a centre of expertise between local authorities and capital markets. On the other hand, there are fears that it is a means by which the British government can pretend that government debt is lower t