Question to the HM Treasury:

To ask Her Majesty's Government what steps they are taking to ensure that future lending terms for the Public Works Loan Board do not restrict councils' access to borrowing, in particular for projects to support economic recovery from the COVID-19 pandemic in areas such as (1) housing, (2) infrastructure, and (3) regeneration.

Local government invests billions of pounds every year to advance local priorities including economic recovery, housing, infrastructure and regeneration. The Government supports this local investment, in part by offering low cost loans to local authorities through the Public Works Loan Board (PWLB).

Local government borrowing has grown substantially in recent years, led by a minority of local authorities borrowing from the PWLB to buy investment assets primarily for yield. The Government is clear that this is not an appropriate use of PWLB loans.

The Government is therefore consulting on a limited intervention to stop this activity, while preserving the ongoing availability of PWLB loans to support economic recovery and other core local priorities such as housing, infrastructure and regeneration. The Government hopes to receive responses to this consultation from across the sector.