§ Mr. Clifton-BrownTo ask the Secretary of State for Transport, Local Government and the Regions what plans he has to amend the rules covering borrowing against public assets; and if he will make a statement. [10408]
§ Mr. RaynsfordWe announced on 21 March 2001,Official Report, column 250W, our intention to abolish the present system of local authority capital controls. The new system will permit authorities to borrow without prior Government approval. Each authority will decide how much to borrow, taking account of the revenue resources it can afford to make available to service debt, and acting in accordance with a professional code being developed by the Chartered Institute of Public Finance and Accountancy. This increased flexibility to invest in their communities will allow authorities to deliver better value for money over the whole range of services, including housing. There is no proposal to remove the present prohibition on the mortgaging of local authority capital assets. The potential seizure of the property by a creditor would threaten the delivery of essential services. Loans are secured on all the revenues of the authority and that will remain the position. Legislation will be introduced as soon as parliamentary time allows.