Laura Sharman 02 February 2021

Proposal for stronger local government Prudential Code

Proposal for stronger local government Prudential Code image

Proposals to strengthen the Prudential Code and prevent local authorities from borrowing to generate yield have been put forward by CIPFA.

The move comes following growing concerns that some councils are taking on disproportionate levels of commercial debt to generate yield.

The proposed changes would make it clear that borrowing for debt-for-yield investment is not permissible under the Prudential Code, and ensure that any commercial investment is consistent with statutory provisions.

The changes would also see the introduction of new prudential indicators on affordability and a Liability Benchmark to promote good practice.

Rob Whiteman, CIPFA CEO, said: 'A minority of councils are currently misinterpreting or not having regard to the current provisions of the Prudential Code. If this trend continues without strengthened provisions, local authorities risk further government intervention into the Prudential Framework.

'Strengthening the Prudential Code will ensure local authorities are protected from unnecessary risk and reduce the threat to the existing principles-based system that allows councils the self-determination to innovate responsibly.

'We encourage finance professionals across the local government sector to share their views.'

SIGN UP
For your free daily news bulletin
Highways jobs

Billing and Compliance Officer - Basildon Borough Council

Essex County Council
Up to £20.0000 per hour
Council Tax Billing Officer - Basildon Borough CouncilBasildon, Essex£20 per Hour PAYE / £25.65 Umbrella Full Time, Temporary Essex County Council (EC England, Essex, Basildon
Recuriter: Essex County Council

Senior Health and Safety Risk Adviser

North Yorkshire Council
£42,839- £47,181 per annum
Are you someone who is able to make impactful decisions? Selby, North Yorkshire
Recuriter: North Yorkshire Council

Senior Health and Safety Risk Adviser

North Yorkshire Council
£42,839- £47,181 per annum
Are you someone who is able to make impactful decisions? Northallerton, North Yorkshire
Recuriter: North Yorkshire Council

Fostering Panel Advisor

Durham County Council
Grade 13 - £47,181 - £51,356
This is a brilliant opportunity to join our Fostering Service in a brand-new role focused on supporting our Fostering Panels.   WHAT IS INVOLVED?    A Seaham
Recuriter: Durham County Council

School Crossing Patrol

Durham County Council
Grade 1 £3,979 (approx.) £12.45 per hour
Join our School Crossing Patrol Service! Are you punctual and reliable? Do you have good communication skills and a strong sense of community spirit? Durham
Recuriter: Durham County Council
Linkedin Banner