Public Works Loan Board
From 1 November 2012, the Government reduced by 20 basis points (0.20%) the interest rates on loans from PWLB to principal local authorities who provide information as required on their plans for long-term borrowing and associated capital spending (the Certainty Rate). From 1 November 2013 rates are reduced by 40 basis points (0.40%) for lending in respect of an infrastructure project nominated by a Local Enterprise Partnership (LEP) (the Project Rate).
Eligibility for access to these concessionary rates is determined by HM Treasury in accordance with the guidance set out below. The PWLB makes no assessment of whether a local authority or project qualifies for a concessionary rate but will require confirmation from borrowers that they have been granted the appropriate approval.
PWLB's lending arrangements are set out in Circular 158 (520KB).
HM Treasury's letter of 7 March 2013 setting out the arrangements for access to the Certainty Rate from 1 November 2013. HM Treasury's list of Qualifying Local Authorities as at 1 November 2016 (217KB).
English, Welsh and Scottish local authorities are able to access the PWLB Project Rate.
HM Treasury has provided guidance for English LEPs.
Up until the end of Financial Year 2016-17, local authorities in Wales will be able to borrow at the preferential Project Rate from the Public Works Loan Board (PWLB) for capital investment in the 21st Century Schools Programme.
Borrowing must support delivery of approved projects in the 21st Century Schools Programme, exclusively. It should be noted that there is a cap on total Project Rate Borrowing by local authorities in Wales of £150 million.
If you intend to borrow from the PWLB under these terms, you must notify the Welsh Government’s Capital Funding Branch (Edwina Meggy 029 2082 6063) of the amount you wish to borrow in advance of making your application to the Treasury.
Welsh Government officials will then confirm to the Treasury that the borrowing is eligible, i.e. that it constitutes eligible expenditure against approved projects in the relevant Financial Year(s).
This approach will also help all parties to ensure that there is no breach of the ceiling.
Scottish local authorities should refer any queries to their devolved contact.