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

To ask the Secretary of State for Communities and Local Government, what support his Department provides to local authorities which cannot repay their loans to the Public Works Loan Board; and if he will make a statement.

Under the prudential capital finance system, local authorities are free to borrow for any capital expenditure without Government consent, provided that they and their auditors are satisfied that they can afford to meet the borrowing costs.

Authorities have a statutory duty to make an amount of debt provision which the authority considers prudent. My Department has issued simple guidance on setting the level of prudent provision (Minimum Revenue Provision), and authorities must have regard to these recommendations.

The Guidance on the Minimum Revenue Provision is available on the DCLG website at: https://www.gov.uk/government/publications/capital-finance-guidance-on-minimum-revenue-provision-third-edition