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

To ask Her Majesty's Government what steps they are taking to monitor the risk exposure of local authorities acting as property developers and commercial landlords with the primary aim of generating income, as recommended by the Public Accounts Committee in their report Financial Sustainability of Local Authorities (HC708), published in November 2016.

On 2 February 2018 Government issued updated statutory codes that govern capital investment and financing to ensure that local authorities take investment decisions after careful consideration of risk and proportionality, including the potential benefits. These changes enhance transparency requirements – including requiring authorities to demonstrate how they have ensured those signing off commercial decisions understand the risks and opportunities and require local authorities to demonstrate that the level of debt taken on and risk is proportionate to the size of the authority.

Individual councils are responsible for their compliance with the codes, within a devolved system. Enhanced transparency requirements make it easier for local taxpayers and others to access the information that they need to hold their local council to account. When councils do not meet the statutory requirements for which they are responsible to deliver adequate services or value for money in their local communities, a range of external systems contribute to the maintenance of regularity, propriety and value for money.