Borrowing

February 25th, 2020

Following Consultation in 2016, the Public Works Loan Board (“the PWLB”) has been abolished by the Public Bodies (Abolition of Public Works Loan Commissioners) Order 2020, S.I. 2020/176.

There is an Explanatory Document prepared by HM Treasury and laid before Parliament under Section 11(1) of the Public Bodies Act 2011.  The PWLB’s functions are to be transferred to HM Treasury.  The Explanatory Document states (paragraph 8.2) that “the key” to the decision is that the Commissioners now exercise no decision-making powers, their recruitment is usually difficult, this risks “a poor and incomplete” Board, and there is a “potential risk to the local government finance system” from their legal ability to block, or approve, individual loans. It is further stated (paragraph 8.3) that efficiencies will be realised by formalising existing arrangements and ensuring that governance reflects those arrangements, and effectiveness will be improved “as Ministers will be able more directly to influence delivery”, including “the implementation of policies”.  It is yet further stated (paragraph 9.1) that the change “will not by itself alter the financing arrangements for local authorities, or how much they are able to borrow”; (paragraphs 10.7, 14.1 and 14.4) that the change will not affect local loans, or the Government policy on lending to local authorities, or the process by which the loan applications or repayments are handled; and (paragraph 13.1) that the change will not affect the delivery of services.

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