For the past nine years I, along with most people, have been calling the PWLB ‘the PWLB’. Since 25th February 2020 however I have been wrong. It’s not the PWLB anymore, or even the ‘Public Works Loan Board’: it’s the ‘PWLB lending facility’. This is because on this date the role of the Public Works Commissioners that sat on the Public Works Loans Board were abolished. The PWLB became a department of the Debt Management Office (DMO) which is a department (or technically an executive agency) of the Treasury. A potential name change to something completely different was consulted on, but as the PWLB was felt to be so familiar it was decided to keep the name along these lines.
Like many of our financial institutions, the PWLB (sorry, the PWLB lending facility) has a long history. It began in 1793 to help alleviate struggling businesses in the recession which followed the French Revolutionary Wars (war ever being the financial innovator, the Bank of England was also set up in 1694 because of wars with France). It was initially called the Exchequer Loan Commissioners and had providing aid following the Napoleonic Wars added to its remit in 1817. From the outset its function was never intended to be that of a commercial bank aiming to make a profit: it was to fund public works for the public good. It’s funding included £250,000 to build the Rotherhithe Tunnel and £200,000 to establish Battersea Park.
In 1875 the Public Works Loans Act created ‘the PWLB’ and the Public Works Loan Commissioners that formed the board, replacing the Exchequer Bill Commissioners. Rather than in general relieving commercial distress, the PWLB’s role was now to fund other bodies for certain types of expenditure. This evolved into a body whose role was to lend money to local authorities to fund capital expenditure.
History also explains why, to this day, the PWLB lending facility is not available in Northern Ireland (although the Department of Finance within the Northern Ireland Executive performs the same role at rates pegged to the rates set by the PWLB). When what is now the Republic of Ireland was part of the UK the PWLB had two offices: one in London and one in Dublin. After partition of the island of Ireland and the creation of the Republic of Ireland as an independent country in 1922 the Dublin office remained (and remains to this day) to serve the Republic. The London office never extended its reach.
The next big change came in 2004 when, rather than a board of people making decision on when a local authority could incur capital expenditure, the issue was devolved to local authorities themselves through the Prudential Code. Although Commissioners were still in place their role was now only ceremonial. Their image was undoubtedly not helped when the Chair of the Public Works Loans Board Tony Caplin was forced to resign in 2014 after he was found to have been made bankrupt two years earlier without declaring it. This paved the way for the PWLB’s final abolition and replacement with a – not quite the same named – entity in 2020.
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