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

To ask the Secretary of State for Housing, Communities and Local Government, what recent assessment he has made of the financial sustainability of local authorities with significant Private Finance Initiative liabilities.

Local authorities are responsible for their own capital strategies and financial management, including borrowing and investment decisions. They must, however, comply with statutory duties and guidance to ensure that all decisions are prudent, affordable and sustainable and consistent with their Best Value duty.

The PFI Programme team attend regular intelligence sharing forums with other teams in the Department who are responsible for overseeing local authority financial stability. The Department provides PFI grant funding to its local authority PFI contracts funding the capital elements of the projects, this ranges 50-70% of the annual Unitary Charge. Local authorities are contractually obliged to pay the annual Unitary Charge under the terms of their PFI Contract. The PFI Grant paid by the Department was awarded by HM Treasury at the Financial Close of the Project Procurement and is paid for the whole of the PFI Contract term to support the Unitary Charge payment.