Debt fuelled acquisition of commercial property by the borough council might be a thing of the past in Hastings.
Tonight members of Hastings Borough Council’s cabinet will hear that a government consultation that ended in July is expected to put an end to councils being able to borrow from the Public Works Loan Board (PWLB) for that purpose.
In a report prepared by finance officer Peter Grace the cabinet will be told that the outcome of the consultation: “…is expected to result in the prevention of borrowing purely for monetary gain/yield. This has arisen as a number of authorities have been viewed as taking too high a level of borrowing and risk and therefore acting imprudently given their size and responsibilities.
“It is expected that this will result in borrowing being controlled more closely with a stop on borrowing for commercial property purchases where yield is the prime objective. The new rules are expected to be introduced in 2021, but this could potentially be earlier.”
Papers will also show that the council’s gross interest payments on the loans it has taken out in the last six years to buy and develop commercial properties around the town stands at £1.9m for this year.
Main photo shows the new Bexhill Road Aldi development which has been funded by Hastings Borough Council’s borrowings.