Overview

The Local Authorities (Borrowing and Investment) Bill aims to increase control over how local authorities in England borrow money and invest funds. It restricts borrowing for non-essential activities, limits land purchases outside their area, and requires supermajorities for risky commercial investments.

Description

This bill introduces several key restrictions on the financial activities of English local authorities:

• Borrowing Limitations: Local authorities cannot borrow from the Public Works Loan Board for commercial property or activities outside their statutory duties.
• Land Acquisition Restrictions: Acquiring land or property outside their own boundaries requires approval from both the principal local authority of that area and the Secretary of State.
• Commercial Investment Restrictions: Investments in commercial risk-taking enterprises need a two-thirds majority vote from the council at a full meeting.

The bill applies to England and Wales and comes into effect two months after receiving Royal Assent.

Government Spending

The bill is not expected to directly increase or decrease government spending. Its primary aim is to control local authority borrowing and investment, potentially limiting future liabilities for the government.

Groups Affected

• Local Authorities in England: These bodies face significant limitations on their borrowing and investment powers, potentially affecting their ability to fund projects and initiatives.
• Developers and Landowners: Restrictions on land acquisition may impact development plans and property transactions involving local authorities.
• Businesses: Reduced investment from local authorities in commercial enterprises could affect business opportunities and growth.
• The Secretary of State: Increased responsibility for approving land acquisitions outside local authority boundaries.

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