Combined Authorities (Borrowing) Regulations 2018 — House of Lords, 2018-05-01
Topic: Mixed Topics
Nicholas Bourne (Conservative, Centre-right): My Lords, I hope that the regulations will meet the same glad response that the previous order met with The draft regulations, if approved and made, will implement a commitment made by the Chancellor of the Exchequer to extend the borrowing powers of mayoral combined authorities that have agreed debt caps with Her Majesty’s Treasury. This extension of borrowing powers is an essential further step for mayoral combined authorities to be able to invest in economically productive infrastructure, giving local government the tools necessary to stimulate local economic growth and productivity Currently, primary legislation provides that combined authorities can borrow only for transport functions. Greater Manchester is the exception to this, as the combined authority inherited predecessor organisations’ borrowing powers for its fire, police and waste functions when these functions were transferred. In comparison, a local authority may borrow for any purpose relevant to its functions, or for prudent management of its financial affairs The Chancellor of the Exchequer announced in the Autumn Statement 2016 the extension of mayoral combined authority borrowing powers, allowing them to invest in economically productive infrastructure, subject to agreeing a borrowing cap with Her Majesty’s Treasury. This followed commitments in devolution deals to further consider the borrowing powers of mayoral combined authorities The regulations confer additional borrowing powers to the six mayoral combined authorities in Cambridgeshire and Peterborough, Greater Manchester, Liverpool City Region, Tees Valley, the West Midlands and the West of England. The regulations, if approved by Parliament and made, will allow each of these mayoral combined authorities to borrow in respect of all their existing functions. The Local Government Act 2003 provides that combined authorities have a power to borrow for transport purposes. The Cities and Local Government Devolution Act 2016 amended the 2003 Act to provide for the Secretary of State to make regulations extending a combined authority’s power to borrow for other specified functions in addition to transport Each mayoral combined authority has a bespoke set of functions—powers—depending on the devolution deals that were agreed with the Government and the legislation approved by Parliament and made. Each of the six mayoral combined authorities has recently agreed a debt cap with the Treasury. Each agreed debt cap specifies the cumulative ceiling for the mayoral combined authority’s debt for each of the years 2018-19 to 2020-21, except in Cambridgeshire and Peterborough, where a new agreement will apply for 2020-21 The Treasury’s requirement for debt caps reflects the Government’s ongoing commitment to balancing the books. Last week, the Office for National Statistics announced that public sector net borrowing has fallen to its lowest level for 11 years. All combined authorities are subject to the same statutory requirements for borrowing as local authorities, which are provided for in the Local Government Act 2003 and statutory guidance—the Act I just referred to. The prudential borrowing regime requires that an authority can borrow lawfully only if it can demonstrate that servicing and repayments of debt are affordable.