£340m to be invested in property by South Cambridgeshire District Council to raise revenue
South Cambridgeshire District Council plans to invest £340million in real estate in the next five years.
A meeting of the full council voted to increase the amount invested in the capital investment strategy from £100million over the next five years.
Asked how much of the money will come from borrowing, a council spokesperson said: “Investments can be funded from our cash reserves or from borrowing, but the decision about whether to use cash reserves or to borrow would be made at the time of any future investment, because the council’s cash flow varies substantially from month to month”.
Conservative Cllr Heather Williams said it was a “significant increase” in borrowing, and asked if it would be affected by a recent rise in the interest rate for councils, adding she found it “very unnerving”.
“I don’t know if I’m comfortable with the scale,” she said.
Leader of the council, Liberal Democrat Cllr Bridget Smith, said: “The important thing is that we have a broad portfolio, that we do not have all our eggs in one investment basket, because that is risky. By spreading our investments, we minimise our risks.
“It’s also important to have exit strategies for all our investments, and that we have a very, very robust asset management programme. We are taking this extremely seriously.”
Cllr Smith added: “The opportunity to do nothing as far as investments is long past. We all know of the challenges facing local government now thanks to the continued reduction in central government funding and the uncertainty of the future. So if we just want to keep on treading water we have to have revenue from investments. If we want to actually start delivering more, and delivering on our priorities, particularly in my mind those to do with decarbonising South Cambridgeshire, we have to generate more money to do it”.
The council’s lead cabinet member for finance, Cllr John Williams, said “we have got nothing to hide in this” and said other councils are doing the same.
He reiterated his leader’s argument, and said “the council needs the income from our investments to maintain our services. Not only maintain our services, but actually to improve our services.
“I accept that commercial investments in particular are risky business, which is why [we] have an investment criteria matrix, which our officers are sticking to rigidly”.
“I think it’s a pretty robust matrix,” he said, “to make sure that we are making sure that we look after the money that our residents pay”.
He said “I am not in any way ashamed of what we are doing here, it’s the future of local government, it’s not only us that’s doing this, it’s every council in this country that is doing it”.
And he insisted there are checks and balances.
According to the council investment strategy document: “the Investment Strategy identifies the sum of £340million for prime and close to prime commercial real estate investment, investment which can generate regeneration or economic development benefits as well as positive financial returns for the council and for investment partnerships with third party developers to deliver new homes.”
In April, the council confirmed it had bought offices on Cambridge Science Park for £13million to raise money from rent.
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More by this authorBen Hatton, Local Democracy Reporter