Local Government: Borrowing

Treasury written question – answered on 18th February 2019.

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Photo of Lord Hollick Lord Hollick Labour

To ask Her Majesty's Government what criteria are applied by the Public Works Loan Board when a local authority seeks to borrow to acquire commercial property for investment purposes.

Photo of Lord Bates Lord Bates The Minister of State, Department for International Development

Responsibility for local authority spending and borrowing decisions lies with locally-elected council Members, who are democratically accountable to their electorates. Local authorities are required to have regard to the Prudential Code and statutory guidance when they borrow from the PWLB or from any other lender, these are published by The Chartered Institute of Public Finance and Accountancy and the Ministry of Housing, Communities and Local Government and form the Prudential Framework. The main objective of the Prudential Framework is to ensure that the capital investment plans of local authorities are affordable, prudent and sustainable. Before it can advance a loan to a local authority, the Public Works Loan Board requires formal assurance from the authority that the loan is within their borrowing powers and the relevant legislation.

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