Clause 2 - Control of borrowing
Local Government Bill
3:00 pm
Mr Robert Syms (Poole, Conservative)
We are debating capital finance, which inevitably has a strong relationship with the revenue budgets. I have scanned through some of the documents and want to know where the private finance initiative falls into the equation. We do not count it as capital, but it is a long-term liability. I am interested in how that is accounted for in the financial indicators that must be produced by local authorities. It will have a big impact on the capital and revenue.
If local authorities felt that the Government, at some point, would intervene to control their local borrowing, they might think that it would be better to go along with the PFI and reduce their borrowing, but have higher revenue costs as a consequence. I want the Minister to put on the record the Government's view of the long-term liabilities of PFI that local authorities have and how that would relate to the financial indicators that we are expected to show, so that we decide whether money can be afforded.