§ Lord Kennet
asked Her Majesty's Government:
What sources of loan finance British local authorities are allowed to approach without central Government approval.
§ Lord Elton
Local authorities in England and Wales require the approval of my right honourable friends the Secretary of State for the Environment and the Secretary of State for Wales respectively to borrow for capital purposes. This takes the form of a block borrowing approval. Subject to that approval, they may borrow in sterling from any source willing to lend to them, and outside the United Kingdom or in foreign currency subject to the additional consent of my right honourable friend the Chancellor of the Exchequer.
In Scotland, local authorities are given block consent by my right honourable friend the Secretary of State for Scotland to incur capital expenditure. They may borrow sterling within the United Kingdom without prior approval but require the consent of my right honourable friend the Chancellor of the Exchequer to borrow outside the United Kingdom or in a foreign currency.