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Local Government: Borrowing

Question for Treasury

UIN HL13390, tabled on 4 February 2019

To ask Her Majesty's Government whether there is an limit on loans which can be extended by the Public Works Loan Board to a local authority (1) in any one year, and (2) overall.

Answered on

18 February 2019

The aggregate amount that may be outstanding in respect of commitments entered into by the Public Works Loan Board is limited, and this limit set out in section 4 (1) of the 1968 National Loans Act. Since December 2017, the limit has stood at £85 billion. There is no separate limit about lending amounts in any one year.

Local authorities are responsible for determining their own limits on the aggregate amount of borrowing that they may have outstanding. The statutory guidance on borrowing and investment was updated in 2018; the updated guidance introduced a new requirement for all English local authorities to set limits for gross debt compared to net service expenditure. Authorities which exceeded their self-assessed limits should, in accordance with the guidance, refrain from making further investments other than short term investments required for efficient treasury management.

Answered by

Treasury