The statement made by John Glen, the Economic Secretary to the Treasury, in the House of Commons on 11 May 2022.
The Public Works Loan Board (PWLB) is a HM Treasury lending facility to local government. The PWLB passes on central Government’s lower cost of borrowing to local authorities to support their delivery of housing, local infrastructure, service delivery and local regeneration. It also helps local authorities to manage their cash flow in a predictable and cost-effective way.
Today, I wish to announce an important step the Government are taking regarding the ongoing effective management of the PWLB.
I will shortly commence section 112 of the Finance Act 2020, amending the National Loans Act 1968 to increase the overall PWLB lending limit from its current level of £95 billion to £115 billion. This will allow the PWLB to make an additional £20 billion of advances to local authorities across England, Scotland, and Wales, continuing to fund essential local projects that will support the delivery of local infrastructure, housing, and service delivery.
The lending limit was previously raised from £85 billion to £95 billion in October 2019. Heightened local authority lending, as highlighted in reports produced by the Public Accounts Committee (PAC) and National Audit Office (NAO), has driven the need to implement this further increase. The ongoing increase in lending largely reflects local authorities’ continued investment in their capital programmes and the expansion of their delivery of services through capital expenditure. The PWLB provides critical support for local authorities through accessible, low-cost lending, and it is important that this access is maintained. I note the action taken by my right hon. Friend the Secretary of State for Levelling Up, Housing and Communities to address instances of excessive risk, which will safeguard the proper and proportionate borrowing and investment provided by the PWLB.
The PWLB remains the best source of accessible, low-cost borrowing for local government. By extending the overall lending limit, the Government are strengthening their commitment to supporting local government delivery of key local priorities.