Mark Whitehead 20 August 2018

Exclusive: Councils investing record amounts in shopping centres

Exclusive: Councils investing record amounts in shopping centres image

Councils are continuing to spend record amounts of money buying up shopping centres, the latest figures show.

Global property investment advisers BNP Paribas Real Estate say UK councils have spent £324.6m on shopping malls in the first half of this year alone - more than the previous highest annual figure for the whole of 2016.

It brings the total invested in the sector since 2009 to more than £1bn.

But finance experts warn that judging whether councils buying shopping centres is a good investment must be decided on a 'case by case basis'.

CIPFA said it could result in gaining extra business rates and creating jobs, but councils must have the commercial skills to 'evaluate, communicate and manage the risk.'

The new figures released exclusively to LocalGov follow the latest deal in which North Somerset Council signed a 35-year agreement to take control of a shopping centre in Weston-super-Mare, branded as 'putting public money at risk' by the Independent leader of the opposition at the Tory-controlled authority.

The council sees the deal as an opportunity to regenerate the city centre as well as creating income of around £1m a year to offset the impact of cuts in Government funding.

Mike O’Donnell, associate director for local government at CIPFA told LocalGov: ‘Whether a shopping centre represents a good investment should be judged on a case-by-case basis.

'Income generation and capital growth opportunities should form a key part of the decision making, but part of the assessment of viability should also consider the social value, given a site might provide numerous regeneration opportunities.

'Regenerating and reinvigorating a site could result in additional business rates being paid to the council, and increase local employment. This can in turn lead to increased external investment and economic opportunity.

'All investment carries risk, but that is not necessarily a reason to avoid it. What is crucial is that councils understand the risk they enter into and apply the right level of due diligence. To do so councils need the right commercial skills in place to evaluate, communicate and manage the risk.

'All local authorities in England and Wales must follow the principles set out in CIPFA’s Prudential Code for Capital Finance in Local Authorities and Treasury Management in the Public Services, which sets out the framework for ensuring capital expenditure plans are affordable, prudent and sustainable and that treasury management decisions are taken in line with good professional practice.'

Read our feature into the risks associated with buying shopping centres here.

Highways jobs

Senior Practitioner - Placement Finding Team

Essex County Council
£28500.0 - £50400.0 per annum
Senior Practitioner - Children and Young People Placement Service- Placement Finding Team Interviews to be held on the 10th September at County Hall, England, Essex, Chelmsford
Recuriter: Essex County Council

People Information Analyst

Essex County Council
Up to £33330 per annum
Please note this is a fixed term contract role for a duration of 12 months. Essex County Council (ECC) is one of the largest and most dynamic local au England, Essex, Chelmsford
Recuriter: Essex County Council

Key stage Officer

Royal Borough of Greenwich
£32430 - £34794
Key Stage Education Officer (Secondary Phase) to work with children in our care, supporting them in classrooms and in their homes with their education SE18 6HQ
Recuriter: Royal Borough of Greenwich

Solicitor/Barrister Advocate - Children’s x4

Sandwell Metropolitan Borough Council
Band I, SCP 44 - 47 (£46,564 - £49,538 per annum) (£24.14 - 25.68 per hour)
To act as the principal advocate for all aspects of advocacy legal work relating to the children’s social care in the county court and high court. Sandwell Council House, Freeth Street, Oldbury B69 3DE
Recuriter: Sandwell Metropolitan Borough Council

Business Support Officer

Sandwell Metropolitan Borough Council
Band C, SCP 5 - 8 (£18,795 - £19,945 per annum) pro rata (£9.74 - £10.34 per hour)
The successful candidate will provide administrative business support to service teams within Adult Social Care, Health and Wellbeing. The Lyng, Health & Social Care Centre, Frank Fisher Way, West Bromwich, B70 7AW
Recuriter: Sandwell Metropolitan 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