§ Mr. Gouldasked the Secretary of State for the Environment what safeguards he is able to apply to seek to ensure that a local authority does not default on a loan and, if it does default, that creditors and employees are adequately protected.
§ Mr. WaldegraveAuthorities are required by law to ensure that current expenditure is balanced by revenue and to follow strict rules of financial good practice. On that basis, they have access to the Public Works Loan Board,550W not least in its role of lender of last resort. All loan debt —both principal and interest—is a statutory charge on all revenues of the authority, which include rents, charges and Exchequer grants as well as rates. Other contractual creditors who are owed money by a local authority (including employees under their contracts of employment) are entitled to take action in the courts to recover it.