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

Rethinking the town centre image

Rethinking the town centre

Andrea Arnall explains how local authorities can maximise the potential of town centre regeneration and attract investment.
Highways jobs

Deputyship Caseworker

Essex County Council
£20200 - £22220 per annum + benefits
We are pleased to be able to offer an exciting opportunity in our deputyship team, a team that provides a service to protect and support the wellbeing England, Essex, Chelmsford
Recuriter: Essex County Council

Senior Practitioner - Family Support & Protection

Essex County Council
£38000.0 - £46000.0 per annum
Senior Practitioner - North Essex Essex County Council (ECC) is one of the largest and most dynamic local authorities in the UK, serving a population England, Essex, Clacton-On-Sea
Recuriter: Essex County Council

Project Engineer (Permanent)

Havant Borough Council
£37,100
We’re looking for an experienced and enthusiastic engineer to join our well-regarded design and implementation team. Havant, Hampshire
Recuriter: Havant Borough Council

Project Engineer (Fixed Term)

Havant Borough Council
£37,100
We’re looking for an experienced and enthusiastic engineer to join our well-regarded design and implementation team. Havant, Hampshire
Recuriter: Havant Borough Council

Housing Strategy & Partnerships Manager

Redbridge London Borough Council
£48,492-£51,450
The Housing Needs Service is undergoing a radical transformation to achieve successful outcomes for our residents. Redbridge, London (Greater)
Recuriter: Redbridge London Borough Council

Local Government News

Latest issue - Local Goverrnemnt News

The June issue of Local Government News contains the full details of all the winning schemes in the 2019 Street Design Awards. From Children's Play to Pedestrian Environment, find out who has been recognised for their innovation and use of best practice.

This issue also explores how local government pension funds can hedge currency risk, how councils can best address the shortfall in school places, and an update on the number of authorities banning the use of Roundup over safety fears.

Register for your free magazine