Public Works Loan Board

HM Treasury written question – answered on 6th March 2017.

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Photo of Lord Myners Lord Myners Non-affiliated

To ask Her Majesty’s Government how much has been lent by the Public Works Loan Board (PWLB) to local authorities for the acquisition of commercial real estate for investment purposes, from 2011 to 2016 inclusive; and how the PWLB is monitoring the risk from such investments.

Photo of Baroness Neville-Rolfe Baroness Neville-Rolfe The Commercial Secretary to the Treasury

The Public Works Loan Board (PWLB) is a statutory body that issues loans to local authorities in England, Scotland and Wales from the National Loans Fund. The PWLB is not required to collect information on the specific reasons that local authorities borrow from it, and so it does not hold information about the amount of lending that has been used for acquisition of commercial real estate.

Before it can advance a loan to a local authority, the PWLB requires formal assurance from the authority that the loan is within their borrowing powers and the relevant legislation. Local authorities are required to have regard to the Prudential Code when they borrow from the PWLB or from any other lender. The main objective of the Prudential Code is to ensure, within a clear framework, that the capital investment plans of local authorities are affordable, prudent and sustainable. Responsibility for local authority spending and borrowing decisions lies with locally-elected council Members, who are democratically accountable to their electorates.

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