PARLIAMENTARY DEBATE
Draft Local Loans (Increase of Limit) Order 2024 - 13 November 2024 (Commons/General Committees)

It is exciting—fantastic—for me to start my new job as a shadow Treasury Minister on something so utterly uncontroversial. Obviously, we will support this; there is no question about that. But I would like to make a couple of points.

It is interesting to see that the Public Works Loan Board amount, on a year-by-year basis, has now gone up to pre-pandemic levels, and that we have come back up quite quickly. It is also worth bearing in mind that that was around the time when the new rules were introduced about prudence; it will be interesting to see whether there is any explanation as to why that has happened now. It could be perfectly harmless, but it is important for monitoring.

I have three principal questions. First, the Minister mentioned the rules that were brought in. Can the Government confirm that they will remain committed to those new rules? That is very important. They were there to avoid speculative investment, and we want the money to be properly used to benefit local communities, albeit at a commercial rate of return. It is important to make sure that speculation does not come into this, so can he confirm that?

Will the Government also confirm that they intend to closely monitor how councils are borrowing? That is important because some well-meaning district councils may make some slightly unwise decisions. What metrics will the Government use to make sure that local authorities are borrowing prudently in accordance with the rules, so that we can understand how that is being monitored? Finally, what steps are being taken to manage debts effectively, ensuring that they do not hinder future potential borrowing requirements or place tighter strain on local authorities that may or may not be struggling with tight budgets for one reason or another?

We are keen to support the order; it is a perfectly reasonable thing and it is important for us to support our local authorities. Some are incredibly innovative and a lot of the money is used to support local communities at a commercial rate of return. We see nothing wrong with that, but I will be grateful if the Minister can help me with those questions. It looks as if we may be finished within five minutes.

As others have said, this legislation is uncontentious; I am happy to support it. This is a good opportunity to highlight the difference that some of these loans make to people’s lives. In my local area of St Albans, the district council has used Public Works Loan Board borrowing to help fund a range of really ambitious projects in our local area. That has included investment in social housing, such as the King Offa and Hedges sites; decarbonisation and improving the energy efficiency of council homes; investment in vehicles and equipment used for recycling, street cleaning and waste collection, which has helped our district council to achieve one of the highest recycling rates in the country; and investment in a regeneration project in the heart of the city, which is providing social, rented and shared ownership homes along with commercial space to rent.

Simply put, the Liberal Democrat administration at St Albans district council is really ambitious for our area, but it could not have achieved so much, or done work at such a scale to make homes warmer and cost less to heat this winter, without access to this productive borrowing facility. We very much hope that future applications from our and other councils will make just as much difference to people’s lives. We are very pleased to support the measure.