Sedgemoor District Council has confirmed it has spent just over £8million on buying a high street fashion outlet outside of Somerset.
The authority agreed in February 2018 to invest up to £50million in commercial property over the next three years, with the rental income being used to fund local front-line services.
The council purchased the Street Retail Park in December 2018 for £8.2M, which includes the village’s Home Bargains and Pets at Homes stores.
It has now revealed its second major investment, purchasing a TKMaxx store on Worcester High Street for £8.05million.
Council spokeswoman Claire Faun told Burnham-On-Sea.com: “Like local authorities around the country, Sedgemoor District Council has been looking at ways of generating income; set against the context of reducing funding coming to local government from the national Government.”
“SDC committed to keeping its portion of the council tax as low as possible whilst still delivering first-class services to its residents.”
“National Government has encouraged local government to become more commercial, business-like and generate income whilst remaining focussed on our core purpose – to support and deliver for our communities.”
“The Council has adopted a Commercialisation Strategy, which sees the council acquire commercial property. The Council owns the asset and the rent from the tenants provides an income. A fund of £50m was agreed by Full Council on 20 February 2018 to support the Commercialism Strategy(agenda item 6).”
“Every decision that is made is being rigorously tested and checked in a process called due diligence. This means that thorough financial and legal background checks and detailed investigations are made, prior to purchasing.”
Asked how the council pays for the deals, she added: “From the £50m fund set aside. To date, investments have been funded from Council reserves and internal borrowing. It does not involve investing money that would have been spent on services.”
“The council’s investments to date were in March 2016 to Aspen Housing and Development for £1,700,000; Dec 2018 – Street Retail Park for £7,770,477; and April 2019 – TK Maxx, Worcester £8,050,000.”
To date, there remains £34m to invest as Aspen Housing and Development was purchased before the formalisation of the Commercialism Strategy.