Question to the Ministry of Housing, Communities and Local Government:

To ask the Secretary of State for Housing, Communities and Local Government, whether the department has considered whether debt restructuring or cancellation will be offered to local authorities struggling with high levels of debt and interest rates.

The local government finance framework gives authorities wide freedoms to borrow and invest, enabling them to set their own capital strategies in response to local needs. It is standard for councils to borrow and to hold debt in the normal course of business, and it remains their responsibility to manage their own budgets. Councils must, however, act within the safeguards of the system and only borrow what they can afford.

The Government does not normally consider debt support to be an appropriate form of financial assistance consistent with the principles of prudence and local accountability. By exception, the Government has made the unprecedented commitment to provide debt repayment support for Woking and Thurrock councils. This reflects the highly exceptional circumstances that these councils hold significant unsupported debt which cannot be managed locally due to historic capital practices and the value for money case for acting to protect taxpayers from the ever-increasing cost of debt. It is essential that the system protects taxpayers as a whole and does not impose pressures that would ultimately be felt elsewhere in the public sector.