Regular readers of this blog will know that it reflects the view of many that the days of council-sponsored city and town-centre malls are long past and certainly before various south Wales councils were persuaded to pour council taxpayers' money into shopping developments which have not matched their promoters' promises. Now Private Eye records:
Just over a year ago the National Audit Office warned tha ounils could find their burgeoning property investments badly exposed to market whims. Yet 2020 saw little let-up in the appetite for commercial real estate. England's patchwork of 353 local authorities added a net £1.5bn to their balance sheets in 2019-20 - just in time for the pandemic to throw the market into disarray. [...] The strategy is simple: borrow money at record-low rates, buy up property, and pay off loan interest and expenses with rental income. Whatever's left can be used to fund public services.
Councils need all the income they can get to cover the shortfall from central government. Alas, theory and practice are different things. Take Newcastle city council, which owns shopping centres and office blocks. The portfolio fell in value by more than 20 percent last year, leaving a £40m hole in accounts which had to be plugged from reserves.
The picture is unlikely to be any different this side of Offa's Dyke.
No comments:
Post a Comment