Treasury Management by English Local Authorities under LGA 2003: CIPFA Codes, Secretary of State Investment Guidance, Borrowing (PWLB/LOBO), Non‑financial Investments, Risk and Capitalisation Rules

Published by a LexisNexis Local Government expert

Practice notes

What is Treasury Management?

Local authorities across England and Wales possess wide-ranging powers to borrow and invest. The way these activities are undertaken is chiefly shaped by the Local Government Act 2003 (LGA 2003) and the statutory instruments made under it. Treasury management, covering both borrowing and investments, sits within the Prudential funding framework created by the LGA 2003. When exercising these powers, authorities must have regard to several sources of guidance:

Guidance from the Secretary of State (third edition in force from 1 April 2018)
Chartered Institute of Public Finance and Accountancy (CIPFA) Treasury Management Code of Practice (2021 edition)
CIPFA Prudential Code (2021 edition)
Government response to the consultation on changes to statutory guidance and regulations: Minimum Revenue Provision

This guidance is updated from time to time to mirror the evolving context for local government and the associated treasury management risks. The latest iterations broaden the scope to encompass matters that can fall beyond traditional treasury activity, including non-financial assets (for example, investment property) and long-term investments or loans linked to regeneration and economic growth schemes. There is a heightened focus on the need for...

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Web page updated on 22/05/2026

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