TAXPAYERS’ cash is being gambled on the property market by Southend Council.
With massive Government funding cuts the council is looking at ways to make money and has decided to play the market despite advice not to.
Housing Secretary James Brokenshire told the House of Commons last week that he was considering “interventions” in councils that continue to make the investments because of the risk it poses to public money.
He added he agreed with warnings from the Chartered Institute of Public Finance and Accountancy that said borrowing to make the investments put public funds at “unnecessary or unquantified risk”.
But Southend Council has defied these warnings, saying they remain “open minded” to making further property purchases.
Councillor James Courtenay, deputy leader of the council, said: “As Government grants continue to reduce, we are having to be more commercially minded and that includes considering investment in local commercial property to bring long–term sustainable income streams to the council to help support frontline services.
“The council has made a small number of commercial property acquisitions in recent years and remains open minded to further acquisitions if they are right, in the interests of the town and offer value for money.
“However, we are not aggressively seeking them and opportunities are considered on an individual basis with careful thought being given to all aspects of the prospective investment.”
Council leader John Lamb told councillors the council has invested in two commercial properties at a combined cost of £12million.
Labour Councillor Ian Gilbert, of the Victoria Ward, said he understands why the council is making the investments and blamed the Government for failing to properly fund local authorities.
He said: “I can understand why they have been driven to consider it. We all know the grant from the Government has all but disappeared.”
Essex County Council has taken the advice and has “pulled back” on investments due to the change to the “risk profile”.
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