Treasury to consider how local authorities invest in commercial property

By Simon Artymiuk   |   Reporter   |
Saturday 23rd May 2020 10:00 am
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PLANS to curb councils from investing in commercial property are unlikely to affect how Welsh local authorities currently operate, the Welsh Government has said.

The Treasury has launched a consultation on plans to prevent councils from making commercial investments which could put taxpayers at risk.

Councils across Gwent have increasingly looked to take a more commercial approach in recent years, by investing in property to support services and avoid having to make cuts.

Monmouthshire council borrowed £21 million to finance the purchase of Newport Leisure Park, but concerns were raised about the way the sale was conducted – with councillors given no opportunity to scrutinise it.

The council has also shelled out £7 million to buy CastleGate Business Park in Caldicot, £5 million for a livestock market near Raglan and £4.5 million for a solar farm in Crick.

Newport City Council has set up a £50-million investment fund, while Caerphilly has set up a similar scheme which included spending £425,000 on three new senior staff posts.

Blaenau Gwent council leader, Cllr Nigel Daniels, has also spoken of the importance of the authority becoming more commercially minded as it launched a new strategy.

The Treasury is now consulting on how councils invest in property – and its plans would affect Welsh councils.

“Our starting point is that local authorities should invest public money in regeneration, housing and delivering services, and not in speculative commercial investments which can put local and national taxpayers at risk,” a spokesman for HM Treasury said.

But the Welsh Government said that while the plans out for consultation are not a devolved matter – it sees no evidence that the changes would affect how councils currently operate.

“The Treasury is consulting on councils’ access to the public works loan board for this purpose,” a Welsh Government spokeswoman said.

“This is not a devolved matter.

“Councils in Wales have continued to follow Welsh Government guidance in relation to commercial investments.

“We see no evidence that this decision should apply in Wales.”

Welsh Government guidance says council investment powers are “for any purpose relevant to its functions and for the purposes of the prudent management of its financial affairs.”

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