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Local Government Finance

Volume 488: debated on Tuesday 3 March 2009

To ask the Secretary of State for Communities and Local Government how much on average it cost a local authority to service a debt of (a) £500,000 and (b) £1,000,000 borrowed (i) on the private markets and (ii) from the Public Works Loans Board in each of the last five years. (258959)

The costs to a local authority of servicing a debt covering money borrowed will depend on a number of factors, such as for example, whether the loan was taken out on a fixed rate or a variable basis. Both the Public Works Loan Board (PWLB) and the private sector offer a number of different loan arrangements. Local authorities are under a responsibility to ensure that they can afford the self-financed borrowing, as set out in the prudential system.