Concerns at investing Worthing taxpayers’ money in high street commercial property have been raised by Labour councillors.
Worthing Borough Council has agreed to increase its commercial property investment fund from the current £75million to £125million, with a maximum amount in any year capped at £50million.
The decision was taken by councillors at a meeting on Tuesday (April 23).
Due to cuts in central Government funding and rising costs local authorities are having to explore income-generating opportunities to avoid cutting services.
By the end of February the council has invested in seven assets valued at £37million, generating an annual net income after borrowing of £868,300.
Marine’s Rebecca Cooper, leader of the council’s opposition Labour group, said they had to find the money from somewhere, but highlighted the risk of investing in high street properties.
She pointed to a recent PWC report which said over the last year a record number of high street retailers had closed.
She added: “We will continue to raise concerns around where we are making these investments.”
But Bob Smytherman (LDem, Tarring) welcomed the report and felt property investment was the right direction of travel as the council ‘needs to raise more money’.
He would even be in favour of raising the maximum limit even further if the right opportunities arose.
Elizabeth Sparkes (Con, Offington), executive member for resources, added: “Anyone who has ever run a business knows managed risk needs to be taken.”
Meanwhile Kevin Jenkins (Con, Gaisford), executive member for regeneration, asked if their strategy was so risky why the opposition had not presented any alternative course of action,
He criticised Labour for ‘pontification and generalising’.
According to an officers’ report: “Certain retail investments have remained attractive to investors and we have made some cautious and limited investment into the retail sector. It is likely that prices will continue to soften into 2019, giving rise to some carefully chosen opportunities.”
The recommendations were approved by 27 votes to 5 with one abstention.