The Welsh Government has limited borrowing powers for capital investment and for managing the volatility of tax receipts. There are limits on the amount that can be borrowed each year. The overall borrowing limits until 1 April 2018 are:
- £500 million for capital spending; and
- £500 million to resource to account for tax revenue volatility..
The Fiscal framework increased capital borrowing powers:
- £1 billion for capital spending; and
- £500 million resource to account for tax revenue volatility..
Additionally, local authorities have access to a system of prudential borrowing for capital projects, under Section 3 of the Local Government Act 2003. Since 2004 local authorities have an obligation to follow the Prudential Borrowing Code for Capital Finance in Local Authorities, developed by CIPFA.
NHS trusts also have borrowing powers, although NHS Health Boards currently do not. A consultation was undertaken in the Fourth Assembly regarding extending the powers of health boards in this respect.