Question to the Department for Levelling Up, Housing & Communities:

To ask the Secretary of State for Communities and Local Government, what assessment he has made of the effect on the financial stability of local councils of purchasing commercial properties with high loan-to-value loans.

Local authorities have the freedom to borrow and invest, without government consent, provided that their borrowing is affordable. It is for each local authority to assess the risk to its financial sustainability of any borrowing or investment activity.

My Department has recently published a consultation on proposals to update the Statutory Guidance on Local Authority Investments with the aim of improving local risk management and transparency of decision making.

The consultation proposes introducing a new requirement for every local authority to present quantitative indicators that will allow assessment of total exposure from borrowing and investment decisions.