To ask Her Majesty's Government what steps they are taking to assist local authorities in managing debt levels.
14 July 2021
Local authorities borrow and invest under the Prudential Framework. This is a permissive system that gives local authorities wide freedoms for borrowing and investment, and it is for authorities to manage their capital strategies and ensure their borrowing is prudent, affordable and sustainable. However, authorities must operate within the legal bounds of the Framework, which sets the statutory duty to ensure all borrowing is affordable, and have regard to the statutory guidance, which sets out good practice.
Government is currently reviewing all elements of the Prudential Framework to ensure it is fit for purpose, and carefully considering where changes are needed to support good investment decision-making and risk management.