Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of cancelling the local authority debt held by the Public Works Loan Board.

A decision to write off PWLB debt would not offer good value for money. The PWLB exists to offer affordable loans to local authorities pursuing local capital projects that have been identified by the elected council as being beneficial to local residents. It is an established principle of the local government finance system that the costs of these local projects are met by their beneficiaries.

If the government were to write off PWLB debt, this cost would move from the local authority that initiated the borrowing to the taxpayer at large. This would have uneven benefits, as it would give a windfall gain to the authorities that had chosen to borrow the most. This would not be fair on local authorities that had chosen to borrow less, or on the taxpayer at large who would have to take on liabilities for projects over which they had no say.