An exploratory study of the utilisation of the UK's Prudential Borrowing Framework

Bailey, Stephen J.; Asenova, Darinka; Hood, John and Manochin, Melina M. (2010). An exploratory study of the utilisation of the UK's Prudential Borrowing Framework. Public Policy and Administration, 25 (4), pp. 347-363.

Abstract

This article considers the utilisation of the UK’s Prudential Borrowing Framework (PBF) and the associated Prudential Code for local government capital finance. It finds that the increased flexibility and local freedom are at the cost of less financial certainty in terms of the risks borne by local authorities and local tax payers. The PBF seems to encourage a less formal approach to risk, being considered inevitable and handled if and when adverse risk outcomes occur. Consequently capital projects may lack affordability, sustainability and prudence. The Prudential Indicators required by the Code are not easily understood by non-specialists and their calculation cannot be used to replace sound judgement or to identify the best financing option.

Publication DOI: https://doi.org/10.1177/0952076709356882
Divisions: Aston Business School > Accounting
Related URLs:
Uncontrolled Keywords: capital finance,Prudential Borrowing Framework,Prudential Code,public sector accounting practice,risk management
Published Date: 2010-10

Download

Full text not available from this repository.

Export / Share Citation


Statistics

Additional statistics for this record