The Liberal Democrat administration at Cotswold District Council has outlined the details of its commercialisation strategy during a full council meeting on 23 September.
A 20-page report was presented by Cllr Tony Dale, cabinet member for Economy and Skills, laying out plans for CDC to borrow up to £54 million to make commercial investments to provide income for building social housing across the Cotswolds.
The report states that CDC should look for investments to range between 25 to 50 years and to yield a 2.5% return on investment each year. If the investment strategy goes to plan it will provide the council with £1.36 million pounds of income each year and will also future proof the authority against any possible future government cuts to funding.
The report also gave examples of the type of investment opportunities the authority would be looking for, such as the acquisition of commercial property in the Cotswolds, regeneration of town centres, delivery of a business park and the construction of solar farms.
Another top priority of the Lib Dem administration is the delivery of social rented housing across the Cotswolds and the strategy is to try and develop a long-term vehicle for holding housing and housing sites. The report also lists giving loans to housing associations as a possible investment opportunity.
The council approved a budget of £350,000 to be spent over the next three years to deliver the plan. The money will be invested in the recruitment of new officers, an economic development delivery officer, a housing delivery officer and £150,000 for consultants to deliver specialist advice and due diligence.
However, the report also advised, “the landscape around commercial investment by local authorities has begun to shift with a clear “steer” from government and professional bodies that pure commercial investments should be avoided.”
Despite this warning, the plan was supported by all the Lib Dem, Green and Independent councillors but it was opposed by all members of the Conservative group.
Cllr Richard Morgan, leader of the opposition Conservative Group said,
“Local Authorities should be looking for ways to bring more revenue into their councils, and we will judge each investment opportunity on its merits. However, it’s not the role of a District Council to act like a hedge fund manager and mortgage the future of the district for up to 50 years.
“With respect to my Lib Dem colleagues and council officers, we don’t possess the right skill set to run this type of hedge fund commercial strategy, where yields are so tight. The slightest miscalculation could ruin the returns for the entire portfolio and leave the authority debt ridden for a generation.”