Published: 3rd Aug 2020

The laws governing the rules around council borrowing should be strengthened, according to a leading public sector organisation.  As part of its response to a Treasury consultation on the future lending terms of the Public Works Loans Board (PWLB), the Chartered Institute of Public Finance and Accountancy (CIPFA) has called for compliance with the Prudential Code to be made a statutory requirement and has committed to strengthening the Code by early 2022. The Prudential Code currently sets out that local authorities should not borrow purely for yield or other speculative purposes. However, while councils must ‘have regard to’ the code, they can choose not to follow it. Changing the legislative requirement from ‘have regard to’ to ‘must comply with’ would ensure that all councils adhere to the requirements of the code, according to CIPFA. Last month, a group of MPs accused the government of being ‘blind’ to the ‘extreme risks’ … (To read the full article, subscribe below)