This Committee highlighted in 2016 that the Department appeared complacent about the risks from local authorities increasingly acting as property developers and commercial landlords with the primary aim of generating income. It also pointed out a risk that the local capital finance framework might not be able to cope with the current, rapidly changing and uncertain institutional and economic environment.19 In that financial year (2016–17), English local authorities acquired commercial property worth £1.8 billion.20 The then Committee recommended the Department develop a much better understanding of these risks, and ensure the framework governing local government capital finance reflected developments in the sector.21 The Department worked with the Chartered Institute of Public Finance and Accountancy (CIPFA) to ensure changes to CIPFA’s statutory prudential and treasury management codes by December 2017. The codes are key parts of the framework governing local authority borrowing and local authorities are required to “have regard” to them. The Department revised its own statutory guidance on local authority investments by February 2018.22 Local authorities bought a further £5.8 billion worth of commercial property in 2017–18, 2018–19 and the first half of 2019–20. In May 2020, the Department told us that its changes had not had “all the effect” that was needed and further changes were required. We concluded the Department had continued to be complacent about the true nature and scale of the issue and that the ‘soft’ approach of guidance changes had failed.23 The Treasury made changes in November 2020 to stop local authorities borrowing from government if they make commercial property purchases. The Department told us these changes had “a very significant impact on borrowing”.24