Mark Whitehead 15 August 2018

Council accused of 'putting public money at risk' over shopping centre investment

Council accused of putting public money at risk over shopping centre investment image

A district council has been accused of putting public money at risk in a 35-year deal to lease a shopping centre from a commercial development company.

North Somerset Council is the latest local authority to strike a deal with a private sector partner involving retail property.

It has agreed to pay an initial £717,696 a year to Legal & General Real Assets which bought the Sovereign Shopping Centre in Weston-super-Mare for £21m.

The annual fee will rise in line with inflation, with a 4% year-on-year cap, and the council will keep any surplus generated by income from tenants at the centre which it will be able to invest in services.

The council told LocalGov it has made no upfront payments and due diligence was undertaken by the professional consultants who 'took a very prudent approach to the future financial position of the centre.'

According to global investment managers BNP Paribas Real Estate, UK local authorities accounted for nearly 70% of all shopping centre investment in the first quarter of this year, spending a record £255.15m in the three-month period.

Conservative-run North Somerset Council says its deal is part of an 'exciting new commercial investment strategy' that will produce more than £1m a year income to help regenerate the town centre and mitigate government funding cuts totalling £90m since 2010.

But the council's Independent leader of the opposition Donald Davies told LocalGov: 'This is putting very large amounts of public money at risk.

'The income stream is very unclear and the only thing we can be sure of is that the cost to the council will increase every year for the next 35 years.

'It may be a wonderful deal but I don't think the council is capable of making that judgment in a very competitive commercial world.'

Photo: © Rob Newman

SIGN UP
For your free daily news bulletin
Highways jobs

Neighbourhood Services Divisional Manager

Northumberland County Council
£60,253
You will provide professional and technical advice on all Neighbourhood Services functions. As an effective leader you will coordinate and manage... Northumberland
Recuriter: Northumberland County Council

Children's Supervising Social Workers and Senior Supervising Social Workers

London Borough of Richmond upon Thames and London Borough of Wandsworth
£35,246 - £42,710
We look for people with a 'can do' attitude, who are prepared to be accountable for achieving the best possible outcomes. London (Greater)
Recuriter: London Borough of Richmond upon Thames and London Borough of Wandsworth

Strategic Business and Transformation Manager

Sandwell Metropolitan Borough Council
£50,555 - £53,722 per annum
This position is on a fixed term contract basis for 12 months from the start date. Sandwell, West Midlands
Recuriter: Sandwell Metropolitan Borough Council

Qualified Social Worker - Family Support & Protection

Essex County Council
Up to £207 per day + Umbrella rate
The Role Family Operations delivers direct provision of services relating to vulnerable children, young people and complex families. England, Essex, Harlow
Recuriter: Essex County Council

Programme Leader

Brent Council
£37,944 to £40,177 p.a. Inc.
Seeking a highly effective manager and leader for mathematics courses with understanding and demonstrable experience of... Wembley, London (Greater)
Recuriter: Brent Council

Public Property

Latest issue - Public Property News

This issue of Public Property examines how public sector organisations can unlock the hidden value in their land, and why a new approach to construction could help boost the outcomes of the Government’s One Public Estate programme.

The December issue also considers why learnings from ancient cities could provide the key to promoting wellbeing in the modern built environment. It also contains a case study on how the London Borough of Westminster has provided high quality care for the elderly alongside a block of luxury apartments.

Register for your free digital issue