The Prudential Code is a professional code of practice that aims to ensure local authorities’ financial plans are affordable, prudent and sustainable. Over 100 participants responded to the consultation earlier this year which set out CIPFA’s proposals for a revised Code.

In the last five years, there has been an increasing trend in local authorities purchasing property solely to make an investment return. Particular concerns arise when these investments have been financed from borrowing.

The revisions to the Code are designed to put safeguards in place so that local government bodies carefully review any investment in property and do not take risks with investments.