Public Works Loan Board

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The Public Works Loan Board (PWLB) (Welsh : Bwrdd Benthyciadau Gwaith Cyhoeddus) was a statutory body of the UK Government that provided loans to public bodies from the National Loans Fund. In 2020, the PWLB was abolished as a statutory organisation, and its functions were allocated to HM Treasury, where they are discharged through the UK Debt Management Office. The members of the PWLB were known as the Public Works Loan Commissioners.

Contents

History

Exchequer Loan and Bill Commissioners

Public Works Loan Act 1853
Act of Parliament
Coat of Arms of the United Kingdom (1837).svg
Parliament of the United Kingdom
Citation 16 & 17 Vict. c. 40

Originally known as Exchequer Loan Commissioners, the Public Works Loan Commissioners were first appointed as an ad-hoc body in 1793 to alleviate commercial distress resulting from the trade recession which followed the French Revolutionary Wars. [1]

In 1817 another single purpose body of commissioners, known as Exchequer Bill Commissioners, were appointed to provide relief following the Napoleonic Wars. They were to receive "no fee, reward or emolument or gratuity whatever" and their task was to consider applications in respect of any works of a public nature which might aid employment. In subsequent years, instead of appointing further bodies of commissioners, Parliament prescribed additional purposes for lending for the existing Exchequer Bill Commissioners thus creating the continuous office of the commissioners which has survived to present time. Over the subsequent 50 years a considerable number of public projects were financed by loans advanced by the Exchequer Bill Commissioners, including, in 1826, £400,000 for improvements to Charing Cross and the Strand which involved the formation of Trafalgar Square. In 1832, £250,000 was used for the construction of the Rotherhithe Tunnel under the River Thames and, in 1846, £200,000 for the establishment of Battersea Park. [1]

Public Works Loan Commissioners

Public Works Loans Act 1875
Act of Parliament
Coat of Arms of the United Kingdom (1837).svg
Parliament of the United Kingdom
Long title An Act to consolidate with Amendments the Acts relating to Loans for Public Works.
Citation 38 & 39 Vict. c. 89
Dates
Royal assent 13 August 1875
Other legislation
Amended by Statute Law Revision Act 1883
Status: Amended
Revised text of statute as amended
Text of the Public Works Loans Act 1875 as in force today (including any amendments) within the United Kingdom, from legislation.gov.uk.
Public Works Loans Act 1880
Act of Parliament
Coat of Arms of the United Kingdom (1837).svg
Parliament of the United Kingdom
Long title An Act to appoint Public Works Loan Commissioners; to grant Money for the purpose of Loans by the Public Works Loan Commissioners and the Commissioners of Public Works in Ireland; and for other purposes relating to Loans by those Commissioners.
Citation 43 & 44 Vict. c. 1
Dates
Royal assent 14 June 1880
Other legislation
Repealed by Statute Law Revision Act 1898
Status: Repealed
Public Works Loans Act 1881
Act of Parliament
Coat of Arms of the United Kingdom (1837).svg
Parliament of the United Kingdom
Long title An Act to grant Money for the purpose of Loans by the Public Works Loan Commissioners and the Commissioners of Public Works in Ireland; and for other purposes relating to Loans by those Commissioners.
Citation 44 & 45 Vict. c. 38
Public Works Loans Act 1882
Act of Parliament
Coat of Arms of the United Kingdom (1837).svg
Parliament of the United Kingdom
Long title An Act to grant Money for the purpose of Loans by the Public Works Loan Commissioners and the Commissioners of Public Works in Ireland and the Irish Land Commission; and for other purposes relating to Loans by those Commissioners.
Citation 45 & 46 Vict. c. 62
Dates
Royal assent 18 August 1882
Other legislation
Repealed by Statute Law (Repeals) Act 2004
Status: Repealed
Text of statute as originally enacted
Public Works Loans Act 1883
Act of Parliament
Coat of Arms of the United Kingdom (1837).svg
Parliament of the United Kingdom
Long title An Act to grant Money for the purpose of Loans by the Public Works Loan Commissioners and the Commissioners of Public Works in Ireland and the Irish Land Commission; and to amend the Acts relating to the said Commissioners, and for other purposes.
Citation 46 & 47 Vict. c. 42
Dates
Royal assent 25 August 1883
Public Works Loans Act 1887
Act of Parliament
Coat of Arms of the United Kingdom (1837).svg
Parliament of the United Kingdom
Long title An Act to grant money for the purpose of certain Local Loans; and for other purposes relating to Local Loans.
Citation 50 & 51 Vict. c. 37
Dates
Royal assent 16 September 1887
Other legislation
Repealed by Statute Law (Repeals) Act 2004
Status: Repealed
Text of statute as originally enacted
Public Works Loans Act 1900
Act of Parliament
Coat of Arms of the United Kingdom (1837).svg
Parliament of the United Kingdom
Long title An Act to grant Money for the purpose of certain Local Loans out of the Local Loans Fund, and for other purposes relating to Local Loans.
Citation 63 & 64 Vict. c. 36
Dates
Royal assent 6 August 1900
Public Works Loans Act 1909
Act of Parliament
Coat of arms of the United Kingdom (1901-1952).svg
Parliament of the United Kingdom
Long title An Act to grant Money for the purpose of certain Local Loans out of the Local Loans Fund, and for other purposes relating to Local Loans.
Citation 9 Edw. 7. c. 6
Dates
Royal assent 16 August 1909
Public Works Loans Act 1911
Act of Parliament
Coat of arms of the United Kingdom (1901-1952).svg
Parliament of the United Kingdom
Long title An Act to grant Money for the purpose of certain Local Loans out of the Local Loans Fund, and for other purposes relating to Local Loans.
Citation 1 & 2 Geo. 5. c. 17
Dates
Royal assent 18 August 1911
Text of the Public Works Loans Act 1911 as in force today (including any amendments) within the United Kingdom, from legislation.gov.uk.
Public Works Loans Act 1919
Act of Parliament
Coat of arms of the United Kingdom (1901-1952).svg
Parliament of the United Kingdom
Long title An Act to grant Money for the purpose of certain Local Loans out of the Local Loans Fund, and for other purposes relating to Local Loans.
Citation 9 & 10 Geo. 5. c. 52
Dates
Royal assent 19 August 1919
Public Works Loans Act 1941
Act of Parliament
Coat of arms of the United Kingdom (1901-1952).svg
Parliament of the United Kingdom
Long title An Act to grant money for the purpose of certain local loans out of the Local Loans Fund, and for other purposes relating to local loans.
Citation 4 & 5 Geo. 6. c. 14
Dates
Royal assent 10 April 1941

The next major landmark was the Public Works Loans Act 1875 [2] which created the Public Works Loan Commissioners and replaced the Exchequer Bill Commissioners. The purpose of the Public Works Loan Commissioners was different from that of the Exchequer Bills Commission and the Exchequer Loan Commissioners as it was not focused on relieving commercial distress, but rather on providing funding to specific bodies for certain categories of expenditure. The Public Works Loans Act 1875, together with the National Loans Act 1968, became the prime statutory basis for the constitution, duties and operations of the Public Works Loan Commissioners. The Public Works Loans Act 1875 introduced a requirement that the Public Works Loan Commissioners make an annual report to Parliament. [1]

In 1887 the method of funding lending by the Public Works Loan Commissioners was changed as it had become increasingly difficult to estimate the amount of loan applications. A Local Loans Fund was created pursuant to the National Debt and Local Loans Stock Act 1887, which was financed by the issue of Local Loans Stock, borrowings on the security of bonds, temporary borrowing and repayments of loans made. Pursuant to the terms of the Public Works Loans Act 1887, funds raised under the National Debt and Local Loans Stock Act 1887 were used to fund lending by the Public Works Loan Commissioners. In 1897 the responsibility for fixing the interest rates provided by the Public Works Loan Commissioners became vested in the Treasury, as is still the case today. [1]

By the end of the First World War the foundations of the present local government structure were firmly in place and substantial funding was required for extensive development programmes of local authorities, particularly for housing and town planning; in 1921-22 nearly £49 million was lent for housing alone. By 1939 total lending by the Public Works Loan Commissioners had reached almost £600 million. [1]

Towards the end of the Second World War, the Treasury issued a memorandum to local authorities which referred to the heavy demands on the money market that would be made after the end of the hostilities. It was proposed that local authorities should borrow for their capital development programmes through the government who would themselves raise money as part of their general borrowing programme. The rates of interest on loans to local authorities would be determined by the government’s own credit and the advances would be made by the Public Works Loan Commissioners. [1]

Post-World War II

Public Works Loans Act 1944
Act of Parliament
Coat of arms of the United Kingdom (1901-1952).svg
Parliament of the United Kingdom
Long title An Act to grant money for the purpose of certain local loans out of the Local Loans Fund and for other purposes relating to local loans, and to enable the functions of the secretary of the Public Works Loan Commissioners to be performed, in the event of his inability to act, by an assistant secretary.
Citation 7 & 8 Geo. 6. c. 16
Dates
Royal assent 21 March 1944
Status: Amended
Text of statute as originally enacted
Text of the Public Works Loans Act 1944 as in force today (including any amendments) within the United Kingdom, from legislation.gov.uk.
Public Works Loans Act 1946
Act of Parliament
Coat of arms of the United Kingdom (1901-1952).svg
Parliament of the United Kingdom
Long title An Act to make further provision as to the appointment of the Public Works Loan Commissioners, to grant money for the purpose of certain local loans out of the Local Loans Fund and for other purposes relating to local loans.
Citation 9 & 10 Geo. 6. c. 41
Dates
Royal assent 26 March 1946
Other legislation
Repealed by Repealed by Public Bodies (Abolition of Public Works Loan Commissioners) Order 2020
Status: Repealed
Text of statute as originally enacted
Public Works Loans (No. 2) Act 1946
Act of Parliament
Coat of arms of the United Kingdom (1901-1952).svg
Parliament of the United Kingdom
Long title An Act to grant money for the purpose of certain local loans out of the Local Loans Fund; to make provision as to the Public Works Loan Commissioners' entering into undertakings to grant loans; and to repeal the provisions of section ninety-two of the Housing Act, 1936, and of section seventy-three of the Housing (Scotland) Act, 1925, as to the minimum rate of interest therein mentioned.
Citation 9 & 10 Geo. 6. c. 75
Dates
Royal assent 6 November 1946
Public Works Loans Act 1947
Act of Parliament
Coat of arms of the United Kingdom (1901-1952).svg
Parliament of the United Kingdom
Long title An Act to grant money for the purpose of certain local loans out of the Local Loans Fund and for other purposes relating to local loans.
Citation 11 & 12 Geo. 6. c. 13
Dates
Royal assent 18 December 1947
Public Works Loans Act 1948
Act of Parliament
Coat of arms of the United Kingdom (1901-1952).svg
Parliament of the United Kingdom
Long title An Act to grant money for the purpose of certain local loans out of the Local Loans Fund, and for other purposes relating to local loans.
Citation 11 & 12 Geo. 6. c. 48
Dates
Royal assent 13 July 1948
Public Works Loans Act 1949
Act of Parliament
Coat of arms of the United Kingdom (1901-1952).svg
Parliament of the United Kingdom
Long title An Act to grant money for the purpose of certain local loans out of the Local Loans Fund, and for other purposes relating to local loans.
Citation 12, 13 & 14 Geo. 6. c. 82
Dates
Royal assent 16 December 1949
Public Works Loans Act 1950
Act of Parliament
Coat of arms of the United Kingdom (1901-1952).svg
Parliament of the United Kingdom
Long title An Act to grant money for the purpose of certain local loans out of the Local Loans Fund, and for other purposes relating to local loans.
Citation 14 & 15 Geo. 6. c. 5
Dates
Royal assent 15 December 1950
Public Works Loans Act 1952
Act of Parliament
Coat of arms of the United Kingdom (1901-1952).svg
Parliament of the United Kingdom
Long title An Act to grant money for the purpose of certain local loans out of the Local Loans Fund, and for other purposes relating to local loans.
Citation 1 & 2 Eliz. 2. c. 3
Dates
Royal assent 16 December 1952
Status: Amended
Text of statute as originally enacted
Text of the Public Works Loans Act 1952 as in force today (including any amendments) within the United Kingdom, from legislation.gov.uk.
Public Works Loans Act 1964
Act of Parliament
Royal Coat of Arms of the United Kingdom (variant 1, 1952-2022).svg
Parliament of the United Kingdom
Long title An Act to make further provision with respect to loans out of the Local Loans Fund, with respect to temporary borrowing by local authorities in Scotland and with respect to the re-borrowing powers of public authorities; to authorise an increase in the loans which may be made to the Government of Northern Ireland; and for connected purposes.
Citation 1964 c. 9
Dates
Royal assent 27 February 1964
Text of the Public Works Loans Act 1964 as in force today (including any amendments) within the United Kingdom, from legislation.gov.uk.
Public Works Loans Act 1965
Act of Parliament
Royal Coat of Arms of the United Kingdom (variant 1, 1952-2022).svg
Parliament of the United Kingdom
Long title An Act to make further provision with respect to loans out of the Local Loans Fund; and for connected purposes.
Citation 1965 c. 63
Dates
Royal assent 5 August 1965
Text of the Public Works Loans Act 1965 as in force today (including any amendments) within the United Kingdom, from legislation.gov.uk.
Public Works Loans Act 1966
Act of Parliament
Royal Coat of Arms of the United Kingdom (variant 1, 1952-2022).svg
Parliament of the United Kingdom
Long title An Act to grant money for the purpose of certain local loans out of the Local Loans Fund.
Citation 1966 c. 16
Dates
Royal assent 26 May 1966
Other legislation
Repealed by National Loans Act 1968
Status: Repealed
Public Works Loans Act 1967
Act of Parliament
Royal Coat of Arms of the United Kingdom (variant 1, 1952-2022).svg
Parliament of the United Kingdom
Long title An Act to make further provision with respect to loans out of the Local Loans Fund.
Citation 1967 c. 61
Dates
Royal assent 27 July 1967
Text of the Public Works Loans Act 1967 as in force today (including any amendments) within the United Kingdom, from legislation.gov.uk.

In 1963, a government white paper, noting the increased reliance of local authorities on temporary borrowing, proposed greater access to funding from the Public Works Loan Commissioners in return for a limitation on temporary debt under a quota system. [1]

The National Loans Act 1968 re-organised the accounting arrangements and, since then, monies for local loans are provided by section 3 of the National Loans Act 1968 and drawn from the National Loans Fund (NLF). Certain obsolete or duplicated lending powers of the Public Works Loan Commissioners were repealed in the 1968 Act and the remainder consolidated. The Treasury’s power to fix the interest rates on loans made by the Public Works Loan Commissioners was re-enacted in terms corresponding with those prescribed for other loans made out of the NLF. [1]

In 1982 the government, in support of its monetary policy, set out to reduce the dependence of local authorities on bank borrowing. The Public Works Loan Commissioners were asked to take steps to increase their share of lending and in a short time they revamped their lending facilities from being a provider of solely longer-term fixed rate funding which took up to ten days to advance to a wide range which included variable rate loans and one-year minimum periods. [1]

Whilst the scope of the Public Works Loan Commissioners, and the source of funding, changed over time, ultimately the Commissioners were still responsible for assessing whether to lend money and to assess such matters as the level of security that should be required. In 2000 the government issued a green paper which suggested replacing the then-existing credit approval system for controlling capital expenditure with a prudential regime to determine affordability. This Green Paper was followed by a White Paper in 2001, which proposed a new prudential capital finance system. The framework for this proposal was introduced in the Local Government Act 2003. The framework provided by the Local Government Act 2003 was supplemented and developed through the Prudential Code, which was published by Chartered Institute of Public Finance and Accountancy (CIFPA). This formed the governance framework for the PWLB lending from 2004. [1]

Since July 2002 it has been managed as part of the UK Debt Management Office, one of HM Treasury's executive agencies. In 2004, the decisions around borrowing requirements and how local authorities use PWLB funds were devolved to local authorities. Local authorities must comply with the Prudential Framework, which comprises the legislation and statutory codes that govern local authority borrowing and investment. There are four statutory codes, which authorities must have regard to, including the CIPFA-produced Prudential Code [3] and the Ministry of Housing, Communities and Local Government to ensure they are borrowing prudently. Following this reform, the role of Commissioners was merely ceremonial and existed so that government lending complied with the statute. Lending was managed within a policy framework set by HM Treasury and loans were processed through the DMO. [1]

Subsequently, new governance arrangements were proposed in a consultation led by HM Treasury in 2016 and the Public Works Loan Commissioner role was formally abolished on 25 February 2020. Their statutory functions, roles and responsibilities transferred to HM Treasury. [4] Day-to-day administration of PWLB loans continues via the DMO on HM Treasury’s behalf. [1]

Operations

The PWLB provides loans to local authorities of all types in Great Britain, primarily for capital projects.

Eligible bodies

Further reading

See also

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References

UKOpenGovernmentLicence.svg  This article incorporates text published under the British Open Government Licence : "PWLB lending facility - History of Public Works Loans". pwlb.gov.uk. UK Debt Management Office . Retrieved 27 April 2021.

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