Fareham council leader says '˜no ceiling' on expenditure for property empire
A COUNCIL could be set to shell out further millions to expand its bulging property portfolio, its leader has revealed.
Fareham Borough Council recently took its spending on properties up to £26.5m with the purchase of the Argos and Dunelm stores in Park Gate.
They were the latest addition in what is fast becoming a property empire for the local authority – and its leader, Councillor Sean Woodward, said it could continue to splash the cash.
Cllr Woodward said that there was ‘no ceiling’ to how much the local authority would be willing to spend in terms of acquiring further properties.
The expenditure has caused concern for the council’s opposition, the Liberal Democrats, with leader Councillor Roger Price saying he is ‘very worried’ about the impact of the purchases in the long term.
Cllr Price said: ‘I do not think the current financial climate is stable.
‘Following Brexit, there has been a great deal of uncertainty and for us to be spending this much, it makes me very worried about the long term.
‘We have picked businesses which seem stable now, but who knows in three years? Just look at BHS.
‘I don’t think anybody predicted that happening.
‘It’s causing the Liberal Democrat group a great deal of concern at the moment.’
The £11m purchase of the Park Gate stores means that three-quarters of the council’s purchases are in the borough.
Its other purchases have included Sainsbury’s and Tesco supermarkets.
The property portfolio brings in an annual income of £1.8m according to the local authority.
Cllr Woodward said the council ‘typically’ has around £30m in reserves.
He said: ‘There is no ceiling and we will not set one.
‘Borrowing costs and interest rates are at an all-time low.
‘For every £65,000 we raise from them, that is one per cent of council tax that we are not having to raise.’
Cllr Woodward added: ‘It makes a lot of sense for us to be making these purchases right now.’
He previously said that the investment strategy had been put in place in the last few years due to central government reducing its funding for councils by over 50 per cent.
The strategy has also been adopted by Portsmouth City Council which has splashed out on five assets in recent years, including a £8.75m Mercedes-Benz showroom in Eastleigh.