Clause 2 - Control of borrowing
Local Government Bill
3:15 pm
Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich and Woolwich, Labour)
Let us assume that we are talking about a police authority, as the hon. Gentleman raised that matter. The police authority sets its budget and must set its prudential borrowing limit as part of the process. There are precepts on the local authority, and the precept is the one interface between the two that the authority must consider. Any other consequences of borrowing decisions made by the police authority are entirely a matter for the police authority, not the local authority. Local people might rightly take a dim view of a police authority that budgeted imprudently and subsequently had to present a larger precept than might appear sensible. The main local authority's interface with the other body will be the precept—there will be no other mechanism. That is why the prudential limit will not necessarily impact on such a case.
The hon. Member for Poole raised the issue of the private finance initiative. It will be addressed in the prudential codes and will be the subject of a substantial debate that we will reach shortly. I urge him to be patient, because we will set out definitional matters that will apply to PFI in detail.
I hope that I have dealt with all the issues raised and that the Committee will agree that the clause should stand part of the Bill.
Question put and agreed to.
Clause 2, as amended, ordered to stand part of the Bill.