Byers offers credit approval carrot for local PSAs

21 Jun 01
Local Government Secretary Stephen Byers has signalled the roll-out of local Public Service Agreements to all top-tier authorities by announcing £300m of unsupported credit approvals (UCAs) for councils that sign up.

22 June 2001

The credits will give authorities greater flexibility to borrow funds to finance initial investment in projects intended to raise service standards and meet PSA targets. So far 90 authorities have said they are interested in negotiating PSA agreements, and this figure is expected to increase when the prospectus calling for bids is published in July.

The government does not underwrite UCAs, so councils will have to demonstrate they can afford the extra debt before they can take advantage of them.

Byers announced the £300m boost at a meeting of the Central Local Partnership, a consultative committee for council leaders and ministers, on June 20. He said it demonstrated the government's commitment to providing better services. 'Driving up the quality of public services will be at the heart of the relationship between central and local government over the next five years,' he added.

In return for drawing up tough performance targets that go beyond Best Value benchmarks, the authorities will be given extra powers and flexibilities to achieve them. If they meet these higher standards, they will get the equivalent of 2.5% of their annual budget in extra funding.

Local Government Association chairman Sir Jeremy Beecham said the move proved ministers' 'strong commitment' to the concept of local PSAs. But he sounded a warning that service improvements depended on greater financial freedom for councils.


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