Recommendation 16

As the UK Government has a devolved structure, local authorities have significant autonomy over their spending and have powers to invest in commercial property. We have, over a number of years, raised concerns over the behaviour of local authorities with regards to commercial property investments, noting as far back as 2016 that the government appeared complacent to the risk that these investments posed to local authority finances.31 In our recent July report into Local authority investment in commercial property, we concluded that the Ministry of Housing, Communities and Local Government (MHCLG) had failed to ensure local authorities adhered to guidance, which led to many taking on excessive and risky debt. We also found that MHCLG did not have the data it needed to carry out its oversight responsibilities.32