Councils May Be Able to Raise an Additional £1 Billion for Debt

The public borrowing may change if a recent plan is adopted by councils and the government. The Westminster Council would like to start changes to the public sector borrowing policy. A report filed recently requests the removal of £1 billion of debt from the public sector’s accounting sheets. Specifically, this document set is referred to as the public sector borrowing requirement, otherwise known as the PSBR. It has been a problem for certain councils as it restricts the cash that they can gather for private markets.

There is a collection of councils which have already shown interest in the measures, which would help them financially recover from the crisis. These councils include the following:

Hammersmith and Fulham

These councils have already drafted preliminary paperwork for the new measures which could be introduced in the early months of 2011. There are also many options for the councils to pursue, all within the same plan. The main idea is to take away the debt off of the balance sheet of the public sector which will be given to the housing minister and the Treasury at the end of January 2011.

Those in favour of the changes believe that with the debt removed, councils will be able to finance more easily their building projects. For the council debt to be removed from the public sheets would bring the UK in line with the rest of Europe. It would thus be removed from the expenditure of the department but would stay in the sheets of the expenditures of the government. This is already being done in Scotland but has not yet been enacted in the rest of the United Kingdom.

There are others who believe that another option would be better for the whole UK. This involves the government changing the entire rule set in the United Kingdom so it would keep out the borrowing from the local authorities and keep it off the PSBR. Most feel that a change would be favourably accepted as new housing rules in the City as it would bring the entire United Kingdom more in line with international rules for housing expenditures. The change would also not change the high credit rating which the UK currently enjoys.

The Westminster Council has been especially vocal in its support for the changes to the housing bill. One of the members of the cabinet, Philippa Roe, has issued many statements in favour of the changes. Roe has called for the changes to take place as soon as possible, despite the fact that most people in the UK are tentative about the environment in which the changes will take place. Roe and other council spokespeople are reminding people that the changes to the housing system will not affect the credit rating of UK debt. Other measures discussed in councils around the UK have been drastic and may in fact change the high credit rating which the UK has on its debt. Only four countries share this high rating. They are the UK, the US, France, and Germany.