As local authorities become increasingly entrepreneurial and dynamic, the transactions which they participate and their use of the prudential borrowing powers pursuant to the Local Government Act 2003 has increased.
We advise local authorities on the issues associated with the use of the powers and related commercial considerations included in the requirements of the Prudential Code, such as the application of the Prudential Indicators.
We have also advised Chief Finance Officers on their responsibilities when a prudential borrowing transaction is to be entered into, including establishing sufficient monitoring processes and which borrowing has to be taken into consideration when determining a local authority's Affordable Borrowing Limit.
The use of prudential borrowing powers often forms part of larger complex arrangements including PPPs, Strategic Partnerships and Regeneration schemes. Our broad expertise means we provide a one- stop shop for clients engaging in such transactions.
Recent projects involving prudential borrowing include:
- Red Door Ventures Limited (market rental business) – Newham LBC
- Graven Hill Developments Limited (UK's largest self-build scheme to date) – Cherwell District Council
- Milton Keynes Waste PPP (council to repay senior debt on successful commissioning of the facility (Milton Keynes Council and AmeyCespa)