Face coverings must be worn in shops and supermarkets in England from Friday 24 July, Boris Johnson has announced.
Enforcement will be carried out by police – not retail staff – and anyone failing to wear a face covering while shopping will be subject to a fine of up to £100, or £50 if paid within 14 days.
The rules to tackle coronavirus will be the same as those currently applicable on public transport in England, which means children under 11 and people with certain disabilities will be exempt.
The wearing of face coverings became compulsory in Scotland last week and around 120 countries – including Germany, Spain, Italy and Greece – now require coverings to be worn in public places.
Announcing the move, a Number 10 spokesperson said: “There is growing evidence that wearing a face covering in an enclosed space helps protect individuals and those around them from coronavirus.
“The prime minister has been clear that people should be wearing face coverings in shops and we will make this mandatory from July 24.”
The decision, due to be outlined by Health Secretary Matt Hancock in a Commons statement on Tuesday afternoon, follows four days of conflicting statements from ministers and demands from opposition MPs for clarity.
Responding to the announcement confirming mandatory face coverings, shadow health secretary Jon Ashworth said: “The government has been slow and muddled again over face coverings.
“Given the government’s own guidance issued on 11 May advised in favour of face masks, many will ask why yet again have ministers been slow in making a decision in this pandemic, and why it’ll take another 11 days before these new guidelines to come into force.”
London mayor Sadiq Khan went further and called the government’s “confused communications” on the subject a “disgrace”.
“We can’t afford to wait another day and the government should bring this policy in immediately – further delay risks lives,” he urged.
And the British Chambers of Commerce’s co-executive director Claire Walker said: “Businesses need clarity on the approach to the wearing of face coverings that is consistent and supported by public health evidence.
“Shops and other indoor businesses need to know what the new rules are as soon as possible.
“Updated guidance, including on enforcement, should be issued swiftly so firms can maintain their COVID-secure status and continue their operations successfully.”
In his most recent statement on face coverings, 12 hours before the official confirmation by Number 10, Mr Johnson said: “I think that as throughout this crisis people have shown amazing sensitivity towards other people and understanding of the needs to get the virus down by doing things cooperatively.
“I think wearing masks is one of them. In a confined space what you’re doing is you’re protecting other people from the transmission that you might be giving to other people.
“And they in turn they’re are protecting you. It’s a mutual thing. People do see the value of it.”
But just one day earlier, Michael Gove suggested masks in shops should not be mandatory, saying he believed shoppers should be encouraged to wear them, but he believed in “people’s good sense”.
And Home Secretary Priti Patel was pictured meeting her French counterpart indoors without wearing a mask over the weekend – despite being seen wearing one speaking to him outdoors on the same day – sparking claims ministers were sending mixed messages.
Since 11 May, government guidance has advised the public to wear face coverings in enclosed public spaces, where they may come into contact with people they would not usually meet.
The use of face coverings became mandatory on public transport in England from 15 June.
Although Mr Hancock will confirm that the government guidance will be updated to make the wearing of face coverings in shops and supermarkets compulsory, he will say that guidance for other settings will be kept under review.
Regulations will be made under the Public Health (Control of Disease) Act 1984. While shop employees should encourage compliance, the government said retailers and businesses will not be expected to enforce the policy.
The impact of HGVs travelling through Sidford and Sidbury is to be assessed – with a weight restriction on lorries still possible.
Devon’s cabinet member for roads had asked officers to look into limitations on the A375 which runs through the two East Devon villages.
Both have been blighted by big vehicles using their narrow roads, and it is feared a new business park off Two Bridges Road in Sidford will make the situation worse.
Plans for the scheme had been turned down over highway safety concerns but were approved on appeal.
A government inspector ruled that the benefits of the multi-million-pound scheme outweighed the effects and inconvenience of an increase in HGV traffic in the area.
Councillor Stuart Hughes, Devon County Council (DCC) cabinet member for highways, has previously championed the idea of a 7.5-tonne weight restriction on the route through Sidbury to the traffic lights junction at Sidford Cross.
A meeting of the East Devon Highways and Traffic Orders Committee (HATOC) heard an update on the proposal on Friday.
Cllr Hughes said: “There has been a lot of concern in Sidbury and Sidford about the increase of HGVs using the road to the business park following the planning approval.
“We will keep an eye of things to see how it pans out and we will be monitoring the impact on traffic carefully and consider any interventions that may be needed on the highway, including a weight limit.”
If the idea became a reality, HGVs which fell foul of the restriction would have to take a signed diversion route away from the villages.
This would likely to be via the A30 to the Daisymount roundabout.
However, Ottery Valley representative Cllr Claire Wright said this would have implications on traffic flows in the B3180 in her ward.
Cllr Hughes added: “Whenever you introduce a weight limit, it will just move the HGVs elsewhere.”
The impact of HGVs will be monitored before any interventions aimed at road safety, if required, are put in place.
Vehicles heavier than 7.5 tonnes would still be able to use the A375 for necessary access and to carry out deliveries.
Councillor Ian Hall has called for the move on the A358, to the north of the town, over safety fears.The road’s current 60mph limit runs from just past the entrance to Axminster Town Football Club’s ground in Tiger Way to the single-file Weycroft Bridge.Calls had been made to cut the restriction to 30mph.
The East Devon Highways and Traffic Orders Committee unanimously agreed on Friday that a Speed Compliance Action Review Forum (SCARF) should look into the measure.
Cllr Hall said: “This stretch of road is a 60mph zone and, as you go south into Axminster, it is still 60mph.
“Literally 20 yards away is the turning into Tiger Way where the football club is and there are real concerns about turning right and left.
“We have speeding motorists who jump the traffic lights on the bridge and it is a real issue at night.
“The stretch needs to be reduced in speed.”
Cllr Phil Twiss added: “I support this as the town has expanded north towards the Weycroft Bridge.
“While the 60mph was sensible ten years ago, it isn’t now, and it is very dangerous, so would support some sort of activity to reduce the speed of cars.”
Councillors unanimously agreed that Devon County Council officers should carry out a review through the SCARF process.
Data from this will help determine if the the current speed limit on the road is still appropriate.
[Owl simply gives a taster to encourage readers to go to her blog. At last we are getting some transparency]
Clair:“A plan to build thousands of new houses across East Devon was unveiled last week, with proposals for specific areas in the county.
I have since spent time talking with strategic planning officers to try and understand the detail of the national policy driving this.
Strategic planning is technical and complicated and takes some learning. I was heavily involved in strategic planning while a councillor on East Devon District Council between 2011 and 2015, so I felt compelled to examine this new plan and its proposals.
I will endeavour to explain my findings below!”
This she does under the following headings. Owl’s view is that her “explanations” highlight the absurdity behind most of the policies and government diktats that will lead to a massive increase in house building in East Devon.
Government housing policy
Affordable/social housing element within GESP
Developers fund the Conservative Party
The employment land con
Police investigation into planning in East Devon, in 2013
Areas of Outstanding Natural Beauty
Who leads this work?
GESP timetable and supporting papers can be found here
“Shoppers were allowed to return to the high street in June as stores began to reopen in England and Northern Ireland, but figures show that few chose to do so.Retail footfall collapsed by 65% compared with the same month last year, according to research by data company Springboard.”
Health considerations were all that mattered in the early stages of the Covid-19 pandemic. Governments ordered businesses to shut even though they knew activity would fall sharply as a consequence. There was a clear message to the public: stay at home and save lives.
The lockdowns had the desired effect. The number of new cases soon peaked; after a lag, so did the number of deaths. There was a clear pattern. Countries that took the toughest action brought the infection rate down more quickly than those that delayed or imposed less draconian restrictions.
So, as the number of Covid-19 cases came down, the focus of governments started to change. They started to fret about the long-term consequences of a protracted lockdown on jobs, poverty and wellbeing, and began easing the restrictions.
This has been done in a phased way. In England, for example, businesses such as garden centres were allowed to open in May, non-essential shops welcomed back customers from 15 June, and it was possible to get a drink in a pub or stay the night in a hotel from 4 July. Gyms, swimming pools and spas were told last week that they could soon reopen.
The government messaging has changed. Instead of the dire warnings about the risk of catching the virus, the line now is that it is safe to go out and have a good time provided precautions are taken. Hence the appearance of the chancellor, Rishi Sunak, as an unmasked waiter at a branch of the restaurant chain Wagamama last week.
It is taking time for the new message to get through. The British Retail Consortium said shopper numbers in the second half of June were more than 50% down on the same period a year earlier despite English non-essential stores being allowed. Pubs and restaurants traded at half their pre-crisis levels in the first weekend of post-lockdown trading in England.
That’s not surprising. The economist Maynard Keynes said one reason for the severity of the Great Depression was the lack of “animal spirits” among entrepreneurs, who were paralysed by uncertainty over their future prospects and therefore reluctant to invest, no matter how low interest rates went. The solution, Keynes said, was for the government to step in and fill the gap left by the private sector, because state investment in public works would boost activity and help revive animal spirits.
Keynes’s analysis explains what is currently happening in the UK and in other western economies, except this time the real drag on activity comes not from a reluctance of businesses to invest (although that is a concern) but of the unwillingness of consumers to spend.
On the face of it, this is curious. Interest rates have never been lower. Incomes have been protected by furloughs and other wage subsidy schemes. Governments have taken a step-by-step approach to restarting their economies, always insisting that what they are proposing is based on scientific evidence.
Yet a return to the pre-crisis level of activity is being hampered by high levels of perfectly understandable uncertainty. People were told this was the most serious pandemic since Spanish flu at the end of the first world war. They were told not to be complacent when infection rates went down because there was a high risk of a second wave. They were told to wear face masks on public transport and to keep their distance in all social situations. When they go for a haircut or a drink in the pub, the barber and the bar staff are wearing masks.
What does that mean? It means life has not remotely returned to normal and nobody knows for sure when it will. Uncertainty prevails, and until that uncertainty melts away there is little chance of a full economic recovery.
Take Australia, a country that acted swiftly at the first signs of the crisis and has a death toll barely into three figures. With a record like that, it might be thought that consumers in New South Wales and Queensland would be relaxed about the lockdown imposed on Melbourne last week after an increase in the number of cases. Yet restaurant bookings in states other than Victoria have suffered even though the number of newly confirmed Covid-19 cases has remained low. The message to consumers in Sydney and Brisbane is that if it can happen in Melbourne it can happen here, so why take a chance.
There are things governments can do to affect consumer psychology and Rishi Sunak tried some of them in his mini budget last week. A temporary cut in VAT for hospitality and tourism is designed to get people back into the habit of eating out and staying the night in B&Bs. Similar thinking lies behind the £10 off “eat out to help out” vouchers for meals in August. The idea is that if people do it once or twice they will realise it is safe and so become less cautious.
It is not that simple, though. Some consumers are not going to fancy dining in an environment that they fear will have all the ambience of an operating theatre, while giving discounts to people who would have eaten out anyway is a waste of money.
Phase 1 of the economic response to Covid-19 was lockdown. Phase 2 was a gradual reopening that kindled hopes of a quick bounce back. Phase 3 is the critical one that will determine whether or not those hopes are realised. The evidence so far suggests it will be a long haul.
Only months after the privatised water sector was vigorously lobbying against Labour’s general election pledge to bring the industry back into public ownership, this summer’s annual filings show record amounts paid to private sector bosses.
Multimillion pound payoffs and golden hellos at Thames Water and record pay for bosses across the water industry have been variously condemned as eyewatering, obscene and a national scandal.
Only months after the privatised water sector was vigorously lobbying against Labour’s general election pledge to bring the industry back into public ownership, this summer’s annual filings show record amounts paid to private sector bosses.
Last week it emerged that Steve Robertson, 62, the former boss of Thames Water who left the company last year, received a £2.8 million pay-off. It included a £2 million ex-gratia payment because he had not received any bonuses during his three-year tenure due to the company’s chronic failures on leaks.
That news follows revelations in The Times of the bonanza promised to his successor, the most generous package ever offered in the sector. Sarah Bentley, 48, who was poached from Severn Trent, has been hired on the promise of a £12 million three-year deal including a £3 million “golden hello” in compensation for loss of bonuses at her former employer.
Liv Garfield, 44, the chief executive of Severn Trent, was paid £2.7 million last year, a rise of 10 per cent, including £1.8 million in bonuses.
Steve Mogford, 64, chief executive of United Utilities, the north west England supplier, was paid £2.5 million, a rise of 5 per cent, of which nearly £1.6 million were bonuses Chris Loughlin, 67, the chief executive of the South West Water group Pennon, had a pay rise of 60 per cent, taking his earnings to £2.1 million, of which £1.4 million was in bonuses.
The bumper payouts coincided with a scathing report by the Commons public accounts committee, which said that the private sector’s stewardship of the nation’s water supplies and the rate of leakage — 3 billion litres a day or 20 per cent of the country’s daily usage — had left the UK within 20 years of running out of water.
Michael Gove, the Cabinet Office minister, previously said that water bosses’ high pay was helping to make the argument for nationalisation.
Rachel Fletcher, the chief executive of Ofwat, the regulator, has said that pay levels have “damaged customer trust”.
Luke Pollard, the shadow environment secretary, said last night: “When millions of litres of water are being lost in leaks every week, water company bosses should not be pocketing huge bonuses and inflated pay.
“Over lockdown, more people spent time at their homes so water bosses know people will be paying more in [metered] water bills. Bumper bonuses are a national scandal when so many households are struggling to afford rising bills.”
Mike Keil, policy head at the Consumer Council for Water, said: “Customers will find some of these eye-watering payments hard to swallow especially where executives appear to be rewarded for poor performance.”
Severn Trent argued that on a wide definition, 67 per cent of Ms Garfield’s bonus was related to customer services. United Utilities said that less than 50 per cent of Mr Mogford’s bonus was customer service-related. Pennon said that less than 10 per cent of Mr Loughlin’s bonus was based on customer service measures.
Is this formal recognition that the Local Enterprise Partnerships idea has failed?
The questions Owl has are these: How is “The Great South West” and its Chairman Steve Hindley accountable to us, the people who live here? Who gets to choose the “Great Leader” of the “Great South West”? How is what they do, and plan to do, on our behalves scrutinised?
Without satisfactory answers to these questions wouldn’t we be in danger of jumping out of the frying pan into the fire?
As owl has said before (eg here and here) these initiatives always seem to involve the same business men (not women) with a background in property or construction, who hop from one quango to another, without achieving any positive change for the region.
Owl is surprised that so many are prepared to jump so unquestioningly on this band wagon.
The government is being urged to move swiftly to recognise the four counties of the far South West as a region in their own right.
Veteran Devon MP Sir Gary Streeter has written to the Prime Minister, with the backing for MPs from across Cornwall and the Isles of Scilly, Devon, Somerset and Dorset.
His letter is prompted by the news that the Government intends to delay any decision until after the forthcoming White Paper on Devolution.
Leaders of the Great South West campaign met the Prime Minister in Downing Street in November last year. They explained the background to their campaign to win recognition for the four counties as a bloc.
Sir Gary said the campaign was supported by the three local enterprise partnerships, all local authorities and all MPs in the region.
“Since 2016, an alliance of all stakeholders behind this project has been painstakingly put in place.” Sir Gary said. This included the Western Morning News, one of our sister print titles.
His letter to the Prime Minister, copied to the Chancellor, the Communities Secretary and the Chief Whip, asks for recognition of the Great South West region now and not after the White Paper on devolution has run its course. Sir Gary said that could result in a delay of up to 18 months.
All the MPs from across the region have given their support, though Sir Gary did not ask Ministers or shadow Ministers to endorse the letter.
“We feel we have waited long enough,” Sir Gary said. “We need this now so we can speak coherently to the Government, and the Government can speak to us.
“I think our region is going to be one of the hardest hit economically by the pandemic, and it will be significant to have a framework for the Government to talk to.
“It has taken a long time to put together this alliance of LEPs, local authorities and business communities. We need to see some success for this campaign to ensure that we keep the alliance together.”
The past couple of years has seen the rise of regional blocs such as the Northern Powerhouse and the Midlands Engine.
“The Government very much likes strategic collaboration and devolution,” Sir Gary said. “We are pushing at an open door.”
In his letter, Sir Gary said the Great South West campaign had put together a “compelling prospectus for growth” in its Securing our Future document. That was launched and submitted before the last election.
“It strongly supports the government’s levelling up agenda by delivering a massive £45 billion boost to the regional economy and creating 190,000 new jobs by 2035,” Sir Gary writes.
“We were pleased to learn that at the Downing Street meeting in November you gave your whole-hearted support to this project.”
He said that Steve Hindley, chair of the Great South West steering group, wrote recently to the Communities Secretary to reiterate the urgency of granting the regional recognition and seedcorn funding needed, “not least to help us recover from the impact of Covid-19”.
He added: “It was a huge disappointment for us to learn last week that the government is not proposing to grant us recognition at this time, but intends to delay any decision until after the forthcoming White Paper on Devolution has been issued and consulted upon, which could easily result in a delay of possibly a year or more.
“There is a strong feeling in our region that other regional groupings have been recognised and supported and that once again, the South West is being short-changed.
“We are writing to draw to your personal attention to the strength of feeling across the region about this matter, and to urge government to release the full potential of the Great South West and the many benefits to our constituents by granting recognition immediately – even if this has to be fine-tuned once the White Paper and subsequent legislation has taken place.”
Another example of Government indecisiveness as Boris Johnson dithers over face masks. Michael Gove demonstrates his libertarian tendencies by saying that wearing them should not be compulsory, but then claims good manners means masks should be worn.
We have been here before when Boris Johnson dithered over introducing lockdown. Dithering costs lives. – Owl
Boris Johnson is under mounting pressure to force people to wear face coverings in shops.
He has resisted calls so far despite admitting the evidence for such a move was growing.
Cabinet Office Minister Michael Gove said it should be voluntary, while trying to guilt-trip people into wearing them in shops.
Sources think a switch in the rules could be announced this week.
It comes as the UK’s Covid-19 death toll rose yesterday by 21 to 44,819.
Labour has called on Mr Johnson to make face coverings compulsory in shops in England – as they are on public transport.
Shadow Cabinet Office Minister Rachel Reeves told the BBC: “I think that would be a sensible way forward. People are increasingly wearing them but greater clarity from Government about that would be helpful.
“People want to do the right thing but they want to know what the right thing is.
“I think it would inspire greater confidence and might encourage more people to go out and spend money if they see more people wearing face masks in shops.”
Mr Gove stopped short of saying they should be compulsory, but claimed good manners meant masks should be worn.
He said: “I would encourage people to wear face masks when they’re inside in an environment where they’re likely to be mixing with others and where the ventilation may not be as good as it might.
“I think that it is basic good manners, courtesy, consideration to wear a face mask if you are, for example, in a shop.”
He added: “The Government at all times does look at the evidence about what the best way to control the disease is… My view is it’s always better to trust people’s common sense.”
Paddy Lillis, chief of shop workers’ union Usdaw, said: “It should never fall on shop workers to enforce the wearing of face coverings. They are dealing with more abuse than normal and this could be another flashpoint.”
Beauty salons and spas are among the places that can reopen from today.
Face masks are due to become mandatory at almost all times in public in the Balearic Islands from today, with fines of about £90.
Elsewhere in Spain, British tourists are also likely to have to adhere to similar tougher restrictions in Andalucia this week.
Meanwhile, Mr Gove echoed the PM’s call for people to return to work if they can. He said it was crucial to “fire up the economic engines”.
TUC chief Frances O’Grady said: “The worry is the Government is being driven by, ‘How do we get people using restaurants and bars?’. For that we need people currently working at home to get back into town centres.
“The more you relax lockdown, the tougher you have to be on public transport to make sure we don’t end up going back to square one with local outbreaks that get out of control.”
A list of 20 hot spot areas has been drawn up by the Government amid fears they will be forced back into lockdown like Leicester.
Two – Ashford and Folkestone – are in Kent, but the rest are in the North and the Midlands. Kirklees and Bradford in West Yorkshire have been targeted for “enhanced support”. Blackburn, Rochdale, Oldham, Rotherham and Barnsley are also of “concern”.
Meanwhile, Home Secretary Priti Patel fears authorities may have avoided tackling illegal sweatshops in Britain’s fast-fashion industry over worries they would be accused of racism.
There are suspicions virus cases in Leicester were fuelled by exploited staff in the city’s textile factories working when ill.
“English local councils are set to shed thousands of jobs and cut services as they count the cost of lost income from multibillion-pound holdings in office blocks, retail parks, airports and cinemas, all badly hit by the coronavirus pandemic…
…Conservative-led councils in south-east England are among the most exposed, accounting for more than half of the commercial property acquired between 2016 and 2019.”
The commercial investments, many acquired in a £7.6bn property spending spree in England over the past four years, were part of councils’ effort to find alternative incomes and protect local services that faced cuts or closure during a decade of deep austerity cuts.
But with Covid-19 lockdown measures closing shops, workplaces and cinemas and leaving some airports deserted, councils’ rents and other revenues have been affected, with two authorities – Manchester city council and Luton council – losing £100m in airport dividends alone.
On Monday a group of MPs will warn that some authorities have taken on “extreme” levels of debt to finance their commercial property spree, risking cuts to services and a big bill for local taxpayers. Members of the public accounts committee (PAC) are criticisal of the government for failing to rein in a handful of councils that have each borrowed more than £1bn to build up their property portfolio.
English councils estimate they will lose £624m in commercial investment income this year as a direct result of the Covid-19 crisis. The government is refusing to offer financial support to cover the shortfall, putting pressure on highly exposed councils to balance their budgets through reserves or service and job cuts.
MPs said the government had been “blind to the level of exposure of the local government sector” to commercial investments, risking a repeat of the Icelandic banks scandal in 2008 when 108 councils from England, Scotland and Wales lost hundreds of millions of pounds in deposits when Iceland’s banking system collapsed.
Meg Hillier, the chair of the PAC, said ministers should bear some of the blame for councils’ reliance on rents from offices and shops. “The [Ministry of Housing, Communities and Local Government (MHCLG)] did not even bother to keep track of the underlying numbers or likely risk but at the end of the day, central government will have to step in if a council fails,” she said.
The most notorious of the property speculators is tiny Spelthorne district council in Surrey, which has built up a £1bn portfolio in four years, snapping up assets such as BP’s head offices at Sunbury-on-Thames for £380m.
Conservative-led councils in south-east England are among the most exposed, accounting for more than half of the commercial property acquired between 2016 and 2019.
Other council investments include petrol stations, supermarkets and, from Ashford borough council in Kent, a cinema complex. Thurrock council in Essex has invested more than £700m, borrowed from other councils, in renewable energy projects.
Aside from borrowing to fund commercial property speculation, councils have put energy and resources into developing assets such as airports to offset the cuts to budgets. In many cases they proved lucrative for both the council and local area, creating thousands of jobs, until the pandemic hit.
Luton borough council, which is reliant on itsincome from London Luton airport to fund just under a quarter of the town’s essential services, is to hold an emergency meeting on Tuesday to approve a £17m cuts plan, including the loss of 365 jobs – more than one in 10 of the council’s roster.
“We were hoping we were coming out of years of austerity when Covid-19 struck,” said Hazel Simmons, the leader of Luton council. The pandemic has wiped out the airport’s passenger and freight traffic, eliminating £30m in dividends due to the council, as the airport’s owner, over the next two years.
The council describes the airport as a “financial lifeline” after its grant funding shrank from £130m to £10m. Over the same period, its annual income from the airport rose from £7.6m to £33m. Under current proposals, any loss of this income will not be covered by central government. Without it, said Simmons, “we would have had to make the cuts we are forced to do now a few years ago, and probably more.”
The council’s proposed £17m cuts to local services over the next few months will affect day centres for older and disabled people, parenting support, neighbourhood enforcement teams and school improvement. “It’s the worst time of my whole tenure,” said Simmons, a councillor since 1991. “We don’t want to do any of those things.”
Luton, which has the second highest reliance on commercial income of any English council, has approached the government for help, pointing out the strategic importance of the airport, but has so far had no response.
Manchester city council, together with nine neighbouring councils in the region, owns 65% of the holding company which operates Manchester, Stansted and East Midlands airports. This year the city council – paid a year in arrears – received an airports dividend of £70m; next April this will be zero.
Spelthorne council told MPs it had launched its property investments to reverse the effects of a decade of cuts. Without its commercial income stream, it said, the government would have to “take over the running of councils directly as they cannot survive without adequate funding”.
Spelthorne rejected concerns it was over-exposed, saying it had received 90% of tenants’ rents for the March quarter and built up substantial reserves. “We believe the council’s ability to withstand the current Covid-19 storm will prove to be the strongest possible demonstration of the council’s robust approach to risk mitigation,” a spokesperson said.
Richard Watts, the chair of the Local Government Association’s resources board, said the government should compensate councils for lost income from commercial investments. “Councils have faced a choice of either accepting funding reductions and cutting services or making investments to try and protect them. As the committee rightly highlights, this was an approach that was encouraged by government,” he said.
The government said it shared concerns about highly exposed councils. “Councils are responsible for managing their finances and must properly consider the risks and opportunities when they make commercial decisions,” an MHCLG spokesperson said.
However, the PAC is scathing of the ministry’s failure to monitor the surge in cheap borrowing by councils from the Public Works Loan Board, a government-backed funding source, or the risks this entails for local services, a problem it first signalled in a 2016 report.
The MHCLG’s promise to tighten up the guidance to prevent councils taking huge, borderline legal risks on commercial investments was not reassuring, the PAC report says. “Ultimately these proposals are four years late and many billions of pounds in borrowing and potentially risky investments too late.”