To ask the Secretary of State for Levelling Up, Housing and Communities, what conditions are typically linked to a loan issued by the Public Works Loan Board to a local authority to carry out regeneration works.
30 May 2022
Under the current system, local authorities are responsible for their borrowing and investment decisions as they are best able to understand local needs. Where an authority borrows from the Public Works Loan Board, they must satisfy themselves that all borrowing is affordable and is compliant with HM Treasury’s lending terms and conditions, which do not permit borrowing if the authority intends to make investments primarily for yield. The authority remains accountable to their electorate for individual investment decisions, including those for the purposes of regeneration.
Authorities may borrow without prior government consent, except for smaller authorities such as parish and town councils which require the government’s approval to borrow for capital purposes. The government reviews all applications before issuing approval. As part of this process, applicants must satisfy the Department’s assessment criteria, which includes providing evidence that the council has considered local support for the capital plans.