Council to Profit from Property, say Labour
But how will that policy impact on community interests?
Purchase of commercial properties in Hastings by the Borough Council (HBC) is a key feature of the Labour Party’s manifesto in the upcoming local elections – so says their leader Peter Chowney. In a recent “comprehensive” public statement he argues that, because the Council can borrow capital from the Public Works Loan fund at well below commercial rates (around 3-3.5% for a 40-year loan), such properties can provide a return on capital.
HBC already owns most of Castleham and Ponswood factory estates, the freehold of Priory Meadow and other property such as the Carlisle pub. More recent purchases include Muriel Matters House on the seafront, for use as the Council’s own offices, the Bexhill Road Retail Park (TkMaxx) and the Sedlescombe Road Retail Park (Dunelm). Rents from this portfolio are thus one of HBC’s biggest sources of income and getting increasingly more vital as receipts from central government’s annual funding contribution and business rates plummet: down since 2010 from £12.7m to £3.9m, a reduction of 69%. Local councils have very little leeway to raise council tax. Commercial property looks like the best income generator.
However what makes sense on the bottom line of a budget spreadsheet may still cause concern to the community that HBC exists to serve. Are policy decisions being determined increasingly by its accountants rather than by broad considerations of community interests? Latest news from the West Marina initiative may be ominous.
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