Infrastructure Bill [HL] — House of Lords, 2015-02-09
Topic: Government Operations
William David McKenzie (Labour, Centre-left): My Lords, I am bound to say that when I saw references to the Public Works Loan Board being abolished a sense of nostalgia swept over me. It took me back to my first finance committee meeting of Luton Borough Council in 1976—noble Lords will remember that in those days if you turned up with a briefcase you were put on the finance committee straight away—and to the regular reports of the borough treasurer thereafter. Little did one realise that we were then in the comparative twilight of the commissioners’ existence The most recent Annual Report and Accounts, in describing the functions of the commissioners, says that they derive from legislation of 1875 and 1968, which has been referred to. However, the report also says that the PWLB’s existence can be traced back to 1793. It became established on a permanent basis in 1817. It is asserted that changes over time have made the PWLB less relevant, to the point where it is suggested that its purpose is redundant. As we have heard, its functions and powers have been delegated to the Debt Management Office. A significant development was the prudential borrowing regime introduced under the previous Labour Government, which obviated the need for local authorities to go through a credit approval process. In fact, the prudential borrowing regime has proved to be a major success and has demonstrated that local authorities act responsibly and prudently when it comes to exercising borrowing powers. The proposition is to include the PWLB in Schedule 1 to the Public Bodies Act 2011 so that the Government can use powers under that Act to abolish it and transfer its functions to an eligible person. It seems as though any necessary consultations are to take place under the PBA processes—presumably about "how" to abolish it, not "if". My colleagues in another place have already challenged the Government on why the consultation promised last July has not taken place. They have also reasonably sought to clarify what residual functions the PWLB undertakes. The foreword to the 2013-14 Annual Report and Accounts described the functions of the commissioners as being, "to consider loan applications from local authorities and other prescribed bodies and, where loans are made, to collect the repayments" As a practical matter, as we know, these responsibilities have been delegated to the secretary—effectively the accounting officer. The PWLB borrows from the National Loans Fund to fund its loans. All interest and loan repayments are paid over to the National Loans Fund. Commissioners are prepared to lend to an authority up to the available capacity in its prudential borrowing limit It seems to us that although the functions have been delegated to others the PWLB’s nominal powers are surely not insignificant. At 31 March 2014 it held loans of approximately £63.7 billion, with corresponding liabilities of the same amount. Its powers to facilitate borrowing and manage loans must be significant, even though delegated. As my honourable friend Roberta Blackman-Woods MP stated in another place, we all, "want assurance that there is good oversight"— and transparency— "of local government borrowing".—[Official Report, Commons, Infrastructure Bill Committee, 13/1/15 col. 333.] Perhaps the Minister would take the opportunity to say how she considers that this will be provided under any new arrangements. Having said all that, we certainly will not oppose these amendments.