Somerset West and Taunton Council is generating income to protect future service provision in the face of continued Government funding cuts.
The Council is pursuing commercial investment opportunities to generate additional income that can be reinvested in service delivery in line with its adopted Commercial Property Investment Strategy.
The Council invested £44m in six properties in the last financial year (2020/21) which will generate an annual rental income of £3.25m.
These are a retail warehouse in Ayr occupied by B&Q; a retail warehouse in Birmingham occupied by Wickes; a car dealership in Stockton-On-Tees, trading as a Jaguar Land Rover franchised dealership; an office in Birmingham occupied by the Highways Agency; a multi-let office in Bristol; and a retail warehouse occupied by The Range in Halifax.
Cllr Ross Henley, Executive Member for Corporate Resources, has told Tone News:
Local authorities have been experiencing a severe reduction in funding year on year. Grant funding from government has been reduced by more than 50 per cent in recent years and continues to fall.
We cannot solely rely upon traditional mainstream funding for services. A lot of district councils are doing the same thing up and down the country.
Our investments are intended to help mitigate this by looking for alternative sources of income to protect and fund the priority local services our businesses and residents value.
We have already seen how successful this strategy can be as it’s gained us £614,000 in the first year. Without this additional income, we would all be faced with some extremely difficult choices.
The Commercial Property Investment Strategy (CPIS) which allows for £100m of investment was approved in December 2019 and refreshed in December 2020.
It sets out the governance framework and parameters for investment which ensure a balanced, diversified portfolio is established which will generate long term income contributing towards sustaining the Council’s front line services for many years to come.
The strategy aligns with one of SWT’s Strategic Priorities – “An Enterprising Council” which states that SWT will become a financially self-sufficient Council which has expanded its commercial activity and generated more income in order to support service provision.
This is reflected in the approved budget for 2021/22 which seeks to grow the Council’s income through commercial investment.