“Guidance recommends sale of risky [council] investment properties”

“Councils should consider disposing of investment properties if they are unable to set aside enough reserves to cover potential losses, according to new guidance.

The Chartered Institute of Public Finance and Accountancy (CIPFA) this week released long-awaited guidance on investment in property, prompted by concerns over the levels of risk being taken by local authorities in recent years. …”

Guidance recommends sale of risky investment properties

Casino councils (EDDC would like to be one)

EDDC story:

https://eastdevonwatch.org/2019/11/04/eddc-a-casino-council/

“Gloucester city council has bought a local retail park for £54 million, almost four times its net annual budget.

It acquired St Oswalds from Hammerson, the FTSE 250 shopping centre owner that is seeking to sell all its out-of-town properties. Tenants at the site include B&Q, Homesense and Mothercare, which went into administration this month.

A spokeswoman for the council said that it could not yet comment on the acquisition because of a non-disclosure agreement.

Councils have spent hundreds of millions of pounds on commercial property in recent years as they try to create a rental income stream to plug funding cuts from central government. Some have sought to buy neglected shopping centres in their areas as part of regeneration plans.

However, critics have raised concerns about the extent to which councils have tied their futures to an uncertain property market. Retail park valuations have fallen sharply as a series of well-known store chains have fallen into administration or have used insolvency procedures to close shops or lower rents. Hammerson reported a 10.9 per cent fall in the value of its retail parks in the six months to the end of June.

The Conservative-led local authority in Gloucester created an £80 million property investment fund in 2017 to help to make up for a £2.6 million deficit anticipated for the subsequent five years. It said that it would borrow 100 per cent of the cash for the fund, indicating that it would seek to find money from the Public Works Loan Board, the government body that issues loans to councils for capital projects.

The Treasury has started to crack down on risky property acquisitions by local authorities by increasing interest rates on new loans from the board. Before last month, the government charged an interest rate margin of 0.8 percentage points over the gilt rate; this has more than doubled to 1.8 percentage points over the gilt rate.

Last month Robert Jenrick, the housing secretary, criticised local authorities that had used borrowing from the board to buy “quite risky assets” outside their areas. He cited shopping centres, which he said “may well not turn out to be good investments at all and [are] only possible because the taxpayer is providing such attractive loans through the board”.

Source: The Times (pay wall)

Has Ingham broken purdah rules on Exmouth Queens Drive?

“Plans for a new Premier Inn for Kingsbridge and an Aldi for Ivybridge have been put on hold.

South Hams District Council were set to hold consultations with the public over the two schemes at the end of 2019, but they have now been delayed until the new year.

The delay has been blamed on the General Election being called and the pre-election Purdah period that means councils have to be careful not to do anything in public that could sway a member of the public to vote for one person or political party. …”

https://www.devonlive.com/news/devon-news/general-election-puts-premier-inn-3554630

EDDC a “casino council”?

“East Devon’s attempts to ‘actively assess commercial investment opportunities’ could make them look like a ‘Casino Council’, it has been claimed.

Cllr Paul Arnott, leader of the East Devon Alliance, questioned the way the council’s careful choices consultation made it look like they were ‘punting an idea about the council being a development corporation’.

The survey, due to be sent out at random to 3,000 residents, asks for their views on services that East Devon District Council run and what is important to them as the council has to tackle a £2.7m funding gap over the next four years. …

Cllr Arnott though raised concerned about the wording in the document. Speaking at Wednesday night’s cabinet meeting, he said: “I worry that this will make us look like a casino council. We need to be informed and hear what services people want, but this looks like us punting an idea about us being a development corporation.

“I am not sure it is what people voted for or what they want, but in the survey, we have to be clear it is borrowed money that is being invested and have to detail it.”

Cllr Ben Ingham, leader of the council, replied and said that he wouldn’t use the same words to describe what the council is doing.” …

https://www.devonlive.com/news/devon-news/casino-council-claims-made-over-3498678

More flack for EDDC Leader Ingram on spending and transparency

Not looking good … now being attacked for  wanting to employ consultants to tell him what town centre problems are:

“East Devon District Council ‘lacks good detailed intelligence about its towns and their economic wellbeing’.

Cllr Ben Ingham, leader of the council, admitted: “This is not a good state of affairs,” when questioned at Wednesday night’s full council meeting.

It came after Cllr Mike Allen asked questions over the decision of the portfolio holder for economy, Cllr Kevin Blakey, to commission a major study into town centres.

Cllr Allen asked for an indication of the cost proposed and in the interests of proper transparency, for the Consultancy brief envisaged be put to the next Overview Committee for discussion before any expenditure is committed. …”

https://www.devonlive.com/news/devon-news/east-devon-lacks-good-intelligence-3474769

“£14 Billion ‘wasted’ by the government on ‘botched’ outsourcing”

“The government has wasted at least £14 billion between 2016 and 2019 on poorly managed outsourcing contracts finds a report from the Reform Think Tank.

The report is based on an analysis of investigations by the National Audit Office NAO), Parliamentary Select Committees and other statutory bodies. The total value of the contracts investigated was £71.1 billion.

The Ministry of Defence accounts for 27 per cent of this waste. This includes a 17 year delay in the full decommissioning of nuclear submarines and a poorly planned army recruitment programme. This saw soldiers forced into backoffice jobs to clear an IT backlog created by an untested IT system created in partnership between the army and Capita.

Other examples include the vastly expensive liquidation of Carrillion, which cost the government at least £148 million as well as involving the time and resources of 14 government departments and public bodies.

Also the Department for Education continued to give Learndirect £105 million after the programme was rated ‘inadequate’ by Ofsted. This should have led to the funding being withdrawn.

A third of the government’s annual budget is spent on outsourced services, at a total of ££292 Billion.

Reform is now calling for an independent regulator of the outsourcing sector which – unlike the NAO or Select Committees would have the power to enforce change and impose sanctions on failing providers.

Senior Researcher and Reform procurement lead, Dr Joshua Pritchard said “Our public services cannot function without outsourcing. But when it goes wrong, it’s taxpayers who end up footing the bill

“The £14.3 billion wasted as a result of poorly drawn up and managed government contracts is inexcusable.

“We need a new regulator with the power to prevent public money being squandered because of totally avoidable mistakes.”

£14 Billion ‘wasted’ by the government on ‘botched’ outsourcing

Is EDDC Leader Ingham “sowing division between communities”?

From a correspondent:

“Like many others, I have a complimentary copy of the Budleigh Journal put through my door which is usually very out of date.

Today –October 17th-I received the October 9th copy. Hence I have just read that EDDC Leader Ben Ingham thinks that it is unfair to villages that they subsidise the Budleigh Salterton free car park on the Green. Originally given to the Town by Lord Clinton.

https://www.exmouthjournal.co.uk/news/consultation-on-pay-and-display-at-budleigh-car-park-1-6304735

What happens to the money received from all the beach huts in BS?

What happens to the money received from the Lime Kiln car park in the summer months, particularly on a hot day when it is difficult to find a car parking space?

And of course towns like BS and Sidmouth do have a very high council tax receipt.

There are cross subsidies on all forms of taxation. We do not expect someone with a chronic illness to pay for their NHS treatment. They are subsidised by those fortunate enough to remain healthy.

It is not helpful or wise for the Leader of the Council to sow division between communities”.