§ Mr. Gordon PrenticeTo ask the Prime Minister, pursuant to his oral answer of 1 FebruaryOfficial Report, column 1121, on the purchase by local authorities of shares in privatised companies, what duties are owed by councils and their advisers to council tax payers which constrain their ability to build very unbalanced portfolios, with special reference excluding certain classes of equities. [13942]
§ The Prime MinisterLocal authorities are free to invest their funds how they choose, subject to their general duty of prudence and other matters set out in professional guidance issued by the accounting bodies. Where authorities place their general funds in investments which are not approved under regulations, receipts from the disposal of those investments are treated as capital receipts. Local authorities' use of capital receipts is controlled through the capital finance system.