Following a consultation on the proposals, ministers announced they will abolish the board, which originated in 1793, and move its lending function to commissioners of the Treasury.
Currently, the functions of the PWLB are delegated to its secretary, who is a civil servant in the UK Debt Management Office, a Treasury executive agency. Councils are responsible for making their own borrowing decisions under the prudential regime.
As a result, the Treasury concluded that the specific role of the PWLB was no longer required, with its lending functions to be transferred to the Treasury under powers in the 2011 Public Bodies Act. This, it concluded, would better align policy and operational responsibilities to current practice.
A consultation found that 25 of 32 respondents agreed the PWLB should be abolished. There were seven responses that did not agree, including two which welcomed the degree of independent oversight of loans offered by PWLB commissioners.
However, the Treasury stated that the commissioners of the PWLB no longer carry out this function under the prudential regime.
“The government’s preferred approach is to transfer the PWLB’s powers to the Treasury, with operational responsibility delegated to the DMO. The main reason for this is to provide a more streamlined, up to date governance arrangement and ensure that ministers and accounting officers are properly accountable to Parliament, thus replacing the current lines of accountability which are outdated and not fit for purpose,” the consultation concluded.
“This proposed change also brings governance arrangements in line with current policy and operational responsibilities.”
