Source · Select Committees · Housing, Communities and Local Government Committee
Recommendation 15
15
Paragraph: 71
Furthermore, whilst we welcome the Minister’s commitment to gathering the best quality data to better...
Conclusion
Furthermore, whilst we welcome the Minister’s commitment to gathering the best quality data to better understand councils’ exposure to commercial investment, we think this should have been done by now. We are also concerned about the lack of a statutory requirement on local councils to comply with the prudential code.
Paragraph Reference:
71
Government Response
Acknowledged
HM Government
Acknowledged
In reviewing the capital system, Government has drawn on the evidence from its continued monitoring of sector data and sector engagement, and evidence that has come to light from those authorities that have approached Government for emergency financial support. The most recent data already demonstrates that both new borrowing and commercial investment decreased significantly in 2020/21 relative to 2019/20. Government is improving its monitoring of the sector through improved data collection and intelligence gathering. Government has now completed the voluntary data survey to gather additional information on sector behaviour and is now using the findings to implement permanent changes to its regular data collection from February 2022. Government is also improving its early identification of risk, by developing additional metrics to use our data and qualitative information in a tool for the earlier identification of risky capital practices. This will be used alongside targeted engagement to address risk and non-compliance in a more timely way. Lastly, local authorities are now required to submit three-year capital spending and borrowing plans in order to access the Public Works Loan Board (PWLB). Government is reviewing all submitted plans to assess the capital plans submitted to determine whether the information provided is compatible with the PWLB’s lending terms, including that the local authority is not borrowing for yield. The information in the plans will be used alongside other data to improve Government’s monitoring of the sector.