Source · Select Committees · Public Accounts Committee
Recommendation 4
4
Accepted
The Bank’s advisory function remains in the early stages of development and uncertainty remains on...
Recommendation
The Bank’s advisory function remains in the early stages of development and uncertainty remains on how it will be funded and how smaller local authorities will benefit from its activities. The Treasury intends the Bank to provide advisory services to local authorities regarding infrastructure projects. This function is currently in pilot phase with three large unitary authorities—Manchester, West Yorkshire, and Bristol—with the aim of creating solutions that are replicable across all local authorities. However, we are concerned that smaller local authorities who may need more support than larger ones (owing to the size of their resources, capacity and capability) should not be left behind in receiving the Bank’s support. The Bank has not worked through how this function should be funded and is currently planning to offer this advice for free while it seeks to establish the replicability of The Creation of the UK Infrastructure Bank 7 its advice. However particular attention needs to be given to avoid past mistakes of making risky loans to local authorities on property and other capital projects which put the authorities’ overall finances at risk. Recommendation: Upon completion of its three pilot schemes, the Bank should write to the Committee setting out how its advisory function will work in practice, including how it will design a funding model that reflects the cost of the support provided, and regulates demand. The Bank should also outline how it will ensure smaller authorities are not left behind.
Government Response Summary
The government will provide the requested information later in Spring 2023 after completion of the pilot projects in Bristol, Greater Manchester, and West Yorkshire Combined Authority. Recognising that the needs of different size local authorities will vary, the Bank has carefully considered how it can deliver effectively across this spectrum.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation provide the requested information later in Spring 2023 after completion of the pilot projects in Bristol, Greater Manchester, and West Yorkshire Combined Authority. These pilots play an important role in helping the Bank develop its offering for local authorities, a key part of the Bank’s remit, and ensures that its support is appropriately reflective of local authority needs. The Bank will share the key insights developed through the pilots and its engagement with a range of local authorities to date. It is already engaged with a range of local authorities for its next wave of advisory work, to be announced shortly. Recognising that the needs of different size local authorities will vary, the Bank has carefully considered how it can deliver effectively across this spectrum. For instance, it already offers advisory support to smaller local authorities through its partnership with the Green Heat Network fund and plans to continue this model with future grant programmes. This will allow government to leverage investment in local infrastructure and ensure that projects are set up for success.