Portsmouth could land extra Â£2m a year after Wightlink ferry base deal is sealed
PORTSMOUTH hopes to pull in more than Â£2m a year after a major corporate deal was struck on the Wightlink base.
The council has sold the guaranteed rent it gets on the ferry terminal in Old Portsmouth from Wightlink to international insurance company Canada Life in a deal worth just over £73m.
In return the council will unlock capital it says will be put back into its property spending strategy, which could create extra income of at least £2m a year.
Tory council leader Donna Jones says the agreement – which will see the council ‘pass on’ the rent it gets from Wightlink on the terminal to Canada Life – will protect services.
Cllr Jones said: ‘We are leading the way nationally for councils looking to create income and this is a great example of how we can use our entrepreneurial approach to benefit local people.
‘Two years ago, we promised we would bring in new money to minimise the impact on services of the cuts in government funding that all councils are facing in this time of austerity.’
Council property and investment manager Tom Southall said: ‘What it will do is to allow us to use the capital we receive from Canada Life to invest through our property investment strategy, generating at least an extra £2m per year.’
Michael White, Canada Life property investment director, said: ‘Canada Life was very pleased to be selected as the preferred bidder against stiff competition.
‘The income stream secured from the council provides an ideal match for the company’s income annuity liabilities.
‘The income strip structure is a novel way for the private sector to provide financial support to the public purse whilst leaving the reversionary value in public sector hands.’