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Councils pushing up Tax but refusing to sell farms, pubs, shops and golf courses

The assets register of Telford and Wrekin Council shows it owns four pubs.  It owns three shopping centres, two theatres. Two farms. Various car parks and a long list of land and buildings at least some of which are likely to be surplus to requirements.

This council has debt of over £200 million if you include the PFI stuff. It is paying over £10 million in debt interest. That is more than one pound in every six that it raises in Council Tax. The Labour council has come up with the solution: A Council Tax increase.

For Cambridgeshire County Council we see they own assorted farm cottages and sport centres, car parks and business parks. Also a castle. How many of their rather large number of caretakers cottages have caretakers, or anyone else, living in them, let alone paying a market rent? Why all these traveller sites? Is the council a soft touch?

At least they publish their asset register on-line. However this is a council with a debt that is exceptionally high and has been rising fast.

Their latest accounts say:

Total debt outstanding at the year-end was £378.3m, well within the maximum limit prescribed by legislation of £495m. There was a net increase of £80.1m in long-term loans in the year and a net decrease of £33.6m in short term loans. New loans were raised to fund the capital programme and working capital requirements.

The interest bill is £20 million which gobbles up 9% of their Council Tax revenue. But rather than a rigorous programme of disposing of surplus assets to reduce debt they leave it to spiral out of control shrugging that it has not yet risen to a level that is actually illegal.

Then there is Herefordshire County Council whose asset register includes such plums as industrial land and several sites encouragingly described as "future investment land." Endless industrial units, workshops, shopping centres, shops. So many farms I lost count after about 70. All under the dead hand of state ownership. Is this Herefordshire or the old Soviet Union.

They own a caravan site. There is also a golf course. Does this Conservative council really believe that golf courses should be part of the public sector?

This is a Conservative, a Conservative council, which has debt of £146 million and is paying over £8 million a year in interest. Last year it raised £88 million in Council Tax but has decided there is no alternative to increasing it by 1.9%. Is it really not possible for them to reduce their debt and thus their interest bill which is such a major item of their spending? Is their asset management truly rigorous? I gently suggest they could try harder.

Other examples:

  • Reigate and Banstead Council get in £12.1 million a year to their coffers from the Council Tax - which they propose to increase by 2%. Of this revenue £900,000 goes in interest on their borrowing. Is the council really sweating their assets? It owns a multi storey car park, shouldn't it be sold? It owns cemetery lodges and farm houses, does anyone live in them? Does it need two Town Halls? Does it need to own a football club, all the sports centres and all the workshops and the Iron Horse pub in Merstham? Could any of its scraps of waste land be sold to be developed for architecturally sympathetic housing?
  • Exeter City Council. This Council is putting up the Council Tax by 4%. It spends £120,000 a year on debt interest while its revenue from Council Tax is £4.75 million. Yet its asset register goes on for 37 pages. Th council has huge interests in retail and industrial premises. Does it need to own a livestock market? Could not ownership of markets, of all things, best be left to free enterprise? Does it really make sense to retain municipally owned hotels, shops and pubs?
  • Aylesbury Vale District Council. This is a Conservative council increasing the Council tax,  something Cllr Phil Yerby has already written about. It's interest bill of £913,000 a year gobbles up 7% of its Council Tax revenue. It's assets register includes a lot of land. Page after page listing it. Much of it described as "amenity" land. If it really is providing amenity then splendid. But if some are scraps of waste land then why not clear up the sites and allow a few traditionally designed cottages to be built on them? They could insist on the local light yellow Gault Clay bricks.
  • Rochdale Council. The list they sent me had 984 items. The details were limited by 500 of them were labelled "surplus" - which may be a clue that they are surpus and the council has not particular reason for hanging on to them. Another 31 are listed as "held for sale." The rest of the list includes a golf course, a couple of farms, a pub... By now it is difficult to be surprised by the range of a municipal property empire. Residents are facing a 3.5% Council Tax rise - although part of this is due to levies from other bodies. The council spends £25.5 million a year on debt interest which amounts to nearly a third of its Council Tax revenue.
  • Cheshire West and Cheshire. Very long assets list. The council are big in the property business. Are there any factories in Ellesmere Port they don't own? Farms, shopping centres, industrial estates, sports centres.. The Council may be Conservative in name but it clearly believes in maximum possible state ownership. Presumably it feels it can manage these assets with a better return than the private sector could manage.  To keep its property empire in tact the council spends £9 million a year on interest on its £230 million debt mountain.

For most councils debt interest payment is a very significant spending item. Why do they not make more effort to reduce it?


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