Clause 8 - Control of Credit Arrangements
Local Government Bill
2:45 pm
Mr Christopher Leslie (Parliamentary Secretary, Cabinet Office; Shipley, Labour)
I simply draw the hon. Gentleman's attention to the subsection, which is clear about what it intends to do. The main exemption, as the draft regulation shows, will be in relation to private finance initiative contracts, which are hybrid. They provide capital assets and services, and the regulations will ensure that PFI contracts are not inhibited by the restriction on the use of credit arrangements.
To elaborate on the issues set out in draft regulation 7 and the accompanying commentary, I should say that PFI contracts will not automatically count as credit arrangements under the new system—that will happen only when they score on the authority's balance sheet. If they do, however, the regulation will provide the necessary safeguard. That is the purpose for seeking to foresee how the subsection might be used in such circumstances.
Amendments Nos. 57 and 58 would require specific consultation with CIPFA, the Comptroller and Auditor General and the National Audit Office. I believe that they are unnecessary. The Government will, of course, fully consult all relevant bodies as appropriate whenever we make such changes. Indeed, that is one of the reasonable requirements that fall on those in government.