PWLB & Loan Approval
Parish and Town Councils have the legal power to borrow money to fund capital expenditure projects, such as building improvements, facility upgrades, or the purchase of major equipment. This power is set out in Section 1 of the Local Government Act 2003, which allows councils to take out loans for capital purposes, subject to statutory conditions. Councils must comply with the Local Government (Capital Finance and Accounting) Regulations 2003, which govern the management, accounting, and reporting of borrowed funds.
Before any loan can proceed, formal approval must be obtained from the Secretary of State at the Ministry of Housing, Communities and Local Government (MHCLG). This ensures that the council’s borrowing is lawful, prudent and sustainable, safeguarding both the council and the communities they serve.
All councils, whether members or non-members of DALC, are required to submit their loan applications to us for review before they will be accepted by MHCLG. This review ensures that applications are complete, comply with all relevant legislation and reflect sound financial planning. Submitting applications through DALC also helps councils avoid delays or refusals by ensuring that all statutory and procedural requirements are fully considered.
DALC provides guidance and support throughout the loan application process. Councils are strongly encouraged to contact us at an early stage, so we can advise on the legislative requirements, financial implications and documentation needed to support a successful application. Early engagement allows us to guide councils in demonstrating compliance with Section 1 of the Local Government Act 2003 and the Local Government (Capital Finance and Accounting) Regulations 2003, as well as ensuring alignment with the council’s long-term financial strategy.
It is also important for councils to note that loans taken under Section 1 are subject to strict accounting and reporting requirements. Councils must maintain detailed records of all borrowing, interest payments, and capital repayments, which must be accurately reflected in their annual accounts in accordance with the Accounts and Audit Regulations 2015.
For guidance on borrowing, assistance with your loan application, or to discuss your council’s capital expenditure plans, please contact the Chief Executive Officer at:
📧 chiefofficer@derbyshirealc.gov.uk
Public Works Loan Board (PWLB)
DALC is committed to supporting all councils in the loan application process, ensuring that borrowing is legally compliant, financially sound, and aligned with the council’s strategic objectives. Submitting your application through DALC is a mandatory step for all councils, and ensures that your council’s request meets statutory requirements and has the best chance of approval by MHCLG.