Published: 25th Feb 2020

A government minister has confirmed the Treasury is looking to review interest rates after reports that councils have gone on a spending spree.

Speaking in Parliament yesterday (February 24), local government minister Luke Hall said the Ministry of Housing, Communities and Local Government is working with the Treasury to ‘review the Public Works Loan Board rates and flexibilities that local authorities have’.

Mr Hall was speaking in response to comments by Labour MP Meg Hillier, who warned that ‘many local authorities are increasingly over-exposing themselves to certain commercial sectors’.

‘The public accounts committee has examined this in depth,’ said Ms Hillier. ‘Putting at risk council taxpayers and the fabric of local government in their areas.

‘He will know that some councils are at risk right now, so what is his department doing to ensure that we are protecting council taxpayers where local government is not doing so well?’

Mr Hall added that he will keep Ms Hillier updated in due course on the progress of that review.

Earlier this month, the National Audit Office (NAO) published a report, which shows councils in England have spent £6.6bn on supermarkets, office blocks and warehouses between 2016 and 2019.

According to the NAO, this is 14.4 times more than councils spent in the preceding three years.

The government also confirmed the local government finance settlement for 2020/21 in Parliament yesterday, following a vote by MPs.

According to ministers, councils in England will have access to a share of £49.2 billion in 2020 to 2021, an increase of £2.9 billion or 4.4% in real-terms.

‘This is a great package of support for local government and one that starts to deliver on the promise to level up services across the country,’ said Mr Hall.

‘It is not just through the settlement that we are investing in local services to deliver on this agenda,’ he added.

‘We have pledged £3.6bn to level up 100 communities across the country through the towns fund; committed £250m in funding for vital infrastructure that will unlock over 20,000 homes; created a £500 million youth investment fund to pay for top-quality facilities for young people; and pledged a crucial £2 billion to back-fill potholes and make our roads safer. That is what this government are delivering—a new programme of investment and renewal in our infrastructure and our public services.’

Photo Credit – Tpsdave (Pixabay)

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