The last decade has left local authorities strapped for cash, by 2020 they will have lost 60 pence from every pound they were allocated by central government a decade earlier, according to the Local Government Association.
Many councils, Hastings Borough Council (HBC) among them, have turned to the acquisition of commercial property in a bid to fill their funding gap. HBC has borrowed tens of millions of pounds from the public works loans board to fund those purchases. These loans will take 40 years or more to repay.
In recent months there have been warnings about the associated risks for councils when they get involved in the commercial property market and we have included links to four of those national media feature items.
Hastings In Focus is looking forward to meeting HBC’s leader, Peter Chowney, today, to talk about the council’s commercial property acquisition programme and to find out just how badly HBC needs the money. We’ll be asking too about how the council does its due diligence.
HBC is already, and has always been, a significant local landlord however recent purchases have taken it in to a whole new area of the property market. HBC owns the Sedlescombe Road North site where Pets at Home and Dunelm are based and it also owns the property that is home to T.K. Max and Carpetrite. HBC has recently taken on the role of property developer funding the redevelopment of the old Peugeot dealership on Bexhill Road to create a new Aldi supermarket and two addition retail units.
Announcements on further property acquisitions are expected in the coming months and with those purchases will come new multi-million pound loans.
It’s a complex issue, it’s one we know the opposition Conservative group on HBC describe as a, “ticking time bomb of local government finance…”.
We’ll be bringing you a full report on our conversation with Mr Chowney later this week and we hope that report will make the issues surrounding the council’s property acquisition programme easier to understand.