Written evidence submitted by Colchester Borough Council

  1. Re council borrowing:
    1. PWLB borrowing is a valued facility for local authorities enabling them to borrow at fixed interest with long durations.  This enables them to make capital investment in local services and affordable housing at a predictable and reasonable cost.  Access to the PWLB and its preferential rates and terms should not be restricted for all councils because of the debt to yield activities of a few.
    2. A key distinction is whether councils are investing in their own geographical or economic activity area. Any investment outside these areas would need careful justification.
    3. Expanding local authorities need to provide much needed housing and business opportunities and should not be prevented from borrowing for development and infrastructure.  Such investment may not be forthcoming from the private sector without the local authority catalyst.
    4. Lending to housing companies was the main development vehicle prior to lifting of the HRA borrowing cap and this should be allowed to continue, and  contractual commitments must be honoured.  Colchester's experience is that these schemes yield 33% of more affordable housing, much higher than commercial developments
    5. Councils should be empowered to invest in carbon reduction and economic recovery, if necessary through borrowing.
  2. Re Covid-19
    1. District councils rely on fees and charges and income to fund council services.  As well as the initial lockdown impact in 2020/21, there is likely to be a long term and significant impact likely to require reductions in council services unless additional government funding is made available.
    2. It is inevitable there will be increased council tax collection losses.  In two-tier areas this will impact not only on billing authorities but to the police and county council preceptors.
    3. Requiring councils to use their reserves to cover Cov-19 impacts will leave councils without a fall back in the event of future emergencies.  The replenishment of reserves will become a future budget pressure.


May 2020