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Local Council Borrowing

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Local Councils wishing to borrow money for capital projects for a period of more than 6 months and for more than £5 x their electorate have to apply to the Secretary of State for permission to borrow.

Applications for borrowing are administered in the first instance by ChALC and councils wishing to start the process by contacting Nikki Hewitt at ChALC. This is the process to follow whether the council is in membership or not.

There is and application form to be completed and accompanying guidance on what is expected. MHCLG (previously DCLG) do not accept applications directly – they must all pass through ChALC (for Cheshire parishes).

A checklist of key information to be provided with any local councils borrowing application can be found here.

When approval is granted the Council may borrow from any reliable source however, the Public Works Loans Board(PWLB) is an independent and unpaid statutory body and the rates of interest offered are very competitive. Any local council wishing to borrow via PWLB should check out their website for rates and availability. Remember – NO borrowing of longer than 12 months can be undertaken without prior permission – no matter what the lending source is.

Below are some useful tips and guidance on borrowing from DCLG:

Borrowing Approval Hints & Tips Note
DCLG Power point presentation on borrowing
Evidence Requirement Takeaway Notes
Template – General Project Consultation
Template Example – Cash Flow Forecast Table

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