Clause 7 - Credit arrangements
Local Government Bill
11:00 am
Mr Christopher Leslie (Parliamentary Secretary, Cabinet Office; Shipley, Labour)
The hon. Gentleman should take a step back from looking at the details of one particular contract. Ordinary borrowing arrangements would simply provide the asset for the authority and would be accounted for in the normal way, but the PFI mechanism, depending on its components and balance of risk, has a reflection on whether it accounts on or off the balance sheet. The regulations ensure restrictions on the nature of the credit arrangements that can be entered into by ensuring proper boundaries and limits. That also encapsulates some forms of PFI arrangements and classes them fairly in circumstances in which they are defined as credit arrangements and count towards the affordability limit. Those are set out, and there will be opportunities in debating a later clause to consider the definitions of accounting practice. If the hon. Gentleman has any specific points, I undertake to find answers then.
I hope that the Committee will regard the clause as robust and necessary in ensuring that credit arrangements are part of the prudential borrowing regime. I commend clause 7 to the Committee.
Question put and agreed to.
Clause 7 ordered to stand part of the Bill.