It seems that Balls’ promise not to borrow includes not excluding local authority housing borrowing from the national debt. This is the common OECD practice; the UK is the only country in the OECD that includes public sector housing borrowing as national debt. (Housing debt is paid for by housing rent, not taxation and thus can/should be excluded.) The Redbrick blog comments here.
Alice Perry, one of the London National Policy Forum representatives, reported that Labour’s National Policy Forum has agreed to write the debt out of the National Debt, which would allow local authorities to borrow to build. (I reported on the NPF here.) …