The Local Government Association has called on chancellor Sajid Javid to introduce a discounted Public Works Loan Board (PWLB) rate for housing projects in the forthcoming Spring Budget.
The association said that, following the Treasury’s decision in October to put an extra one percentage point on new loans, Javid should introduce a discount rate for crucial infrastructure projects, including housing.
In addition, the LGA’s submission said that extra funds raised by the Treasury resulting from the rate rise should be directed to councils.
It said: “On the basis of council borrowing from PWLB in 2018/19, if no discounted rates are offered, the rate increase will result in a windfall of £80m to the Exchequer which has not yet been allocated for spending on a particular priority.
“The income received by the government from the rate rise must be reused in the form of additional funding for local government.”
Meanwhile, councils from the biggest cities in the UK have called on the government to use the forthcoming Budget to deliver more fiscal devolution.
Representative bodies Core Cities UK and London Councils said that even with a reform of business rates and council tax, the UK would remain one of the most centralise countries in the world.
Peter John, chair of London Councils, said: “It’s time to end the culture of local leaders and mayors from all over the country being forced to go begging to Whitehall for hand-outs each year.
“Local communities know how best to promote economic growth and meet the needs of communities in their areas and we need to have the freedoms and powers to do so now.”
