The 2019/2024 business plan @cambscc offers the reasoning behind decision to “create a commercial investment portfolio to maximise the available return to support the delivery of a balanced budget”.

Of two examples quoted one is @spelthorneBC
“Cambridge and Peterborough City Councils, and Huntingdonshire DC, have been undertaking such acquisitions for some time.

“Examples from other local councils include: Spelthorne BC - £200m+ commercial portfolio developed over nine years - £360m investment in BP office park
Spelthorne may not turn out to have been the best example for councillors in Cambridgeshire to look for financial astuteness.

This from @TBIJ (The Bureau of Investigative Journalists) a week or so ago@
“A council has been accused of likely breaking the law and could be taken to court by its own auditors after borrowing £1bn in public money to invest in commercial property, according to explosive letters seen by the Bureau.
In the letters KPMG, one of the “Big Four” accounting firms, sets out why it has spent two years refusing to sign off the accounts of Spelthorne borough council, a tiny local authority in Surrey that spent £1bn of public money on office blocks.
The auditor says its legal advice found it was likely that the purchase of three office buildings for £239m in 2017-18 was unlawful because Spelthorne ignored rules that forbid councils borrowing purely to make a profit on subsequent investments.
KPMG warns it could take the unprecedented step of going to court to seek a ruling that the council has broken the law.
If the court agreed, it would not only call into question the entirety of Spelthorne’s £1bn investment portfolio but potentially have implications for other councils that have also borrowed heavily to fund property purchases, as well as other money-spinning investments.
Spelthorne’s spending, funded entirely by borrowing from the public purse, is the most high-profile example of cash-strapped local authorities buying property in the hope that rental income can replace money lost to government cuts.
In 2018-19 councils across England and Wales spent £6.6bn on acquiring offices and shopping centres – more than ten times the amount spent in the previous three years.
However, the coronavirus crash and subsequent wide-scale plans to permanently switch from office to home working means much of that investment could be at risk, as the value of commercial property slumps.
Earlier this year an inquiry by the Public Accounts Committee into local authority property investments, prompted in part by a series of Bureau investigations, accused the government of being asleep at the wheel while councils ignored the rules and borrowed disproportionately
This was to fund spending sprees. The Treasury said it would ban councils from making such investments, but has yet to follow through on the threat.
It is unclear exactly what would happen if a judge were to rule against Spelthorne because an auditor has never taken such a “nuclear option” before. However, a senior figure within the council said they were “extremely concerned” that it could bankrupt the authority.

• • •

Missing some Tweet in this thread? You can try to force a refresh
 

Keep Current with john elworthy

john elworthy Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @johnelworthy

18 Jun
1:A short thread on a moment in Fenland politics. Politics, as many of you know, in Fenland can be a challenging issue to report on fairly and accurately.

Wisbech is especially fraught because of the make-up of the local Conservative association.
2:They effectively run politics in the town and decry anyone who opposes them.

Woe betide if you cross the floor, as former mayor Michael Hill did. He’s since been vilified and suddenly has become the laziest councillor ever (well according to his former colleagues that is).
3:It is very difficult reporting on any of this, and I refrained from publishing copies of an email exchange between the Tory leader @fenlandcouncil Chris Boden and Peter Freeman.

The latter has moderate ‘form’ insomuch as he stood as an independent (unsuccessfully)in 2019.
Read 16 tweets

Did Thread Reader help you today?

Support us! We are indie developers!


This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!