Clause 13 - Security for money borrowed etc
Local Government Bill
10:30 am
Mr Christopher Leslie (Parliamentary Secretary, Cabinet Office; Shipley, Labour)
Most hon. Members will now be clear that the clause is closely linked to clause 6 in terms of providing a safeguard to lenders. Clause 13 is even more important in that respect: it ensures that local authorities may not offer their property as security for loans.
The hon. Members for Runnymede and Weybridge and for Kingston and Surbiton asked what specific review we had undertaken to re-examine the fundamental principles in this area. We have not commissioned any studies or any accountants to do so. However, during the establishment of the prudential regime and in re-examining fundamentally the principles that underpin the capital expenditure and borrowing rules Ministers, including myself, came to the conclusion that this principle should be continued, for good, long-established reasons.