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

Social Worker - Children With Disabilities (CWD) - Chelmsford

Essex County Council
£30906 - £42254 per annum + Free Parking & Great Benefits
Please note that this opportunity is NOT OPEN to Newly Qualified Social Workers. In line with the newly created Skills and Capability Framework for England, Essex, Chelmsford
Recuriter: Essex County Council

Economic Data Analyst - SELEP - South East LEP Area

Essex County Council
£30906.0 - £34017 per annum + + Great Benefits Package
Please note that while listed with Chelmsford as the primary location, existing members of the SELEP team reside across Essex, Kent, East Sussex and b England, Essex
Recuriter: Essex County Council

Sector Engagement Lead - SELEP - South East LEP Area

Essex County Council
£39168.0 - £43299 per annum + + Benefits Package
Please note that while listed with Chelmsford as the primary location, existing members of the SELEP team reside across Essex, Kent, East Sussex and b England, Essex
Recuriter: Essex County Council

Director for Adult Health & Social Care

Nottingham City Council
circa £103,000
We are really excited to offer a unique opportunity to join our Leadership Team as our new Director for Adult Health and Social Care Nottingham, Nottinghamshire
Recuriter: Nottingham City Council

Finance Assistant (P2P & Income)

Essex County Council
Negotiable
Job Purpose Purchase to Pay (P2P) and Income aims to provide a comprehensive financial transactional and support service, maximising new and innovat England, Essex, Chelmsford
Recuriter: Essex County Council

Public Property

Latest issue - Public Property News

This issue of Public Property examines how how flexible workspaces can lead the way in regeneration for local authorities, Why local authority intervention is key to successful urban regeneration schemes and if the Government’s challenge of embracing beauty is an opportunity for communities.

The March issue also takes a closer look at Blackburn with Darwen Council's first digital health hub to help people gain control over health and care services.

Register for your free digital issue