Babergh District Council approves 2019/20 business plan for controversial out-of-county investment firm
Babergh District Council has signed off on its investment firm’s business plan for the year, through which millions of pounds will be controversially invested into out-of-county retail, office and commercial property.
Cifco Capital Ltd is a property investment firm jointly owned by Babergh and Mid Suffolk district councils, which aims to bring in income without the council having to raise taxes or cut frontline services.
To date, it has pumped £50 million into 12 properties, with both councils signing off a further £25 million investment this year.
Babergh approved the Cifco Business Plan for 2019/20 on Tuesday evening, with Mid Suffolk set to discuss the matter tonight.
A spokeswoman for Babergh District Council said the property investment arm would now be able to provide £1.4 million annually for council services, which the authority claims is the equivalent of raising council tax by 12 per cent.
But just one of the properties is based in Suffolk, and investment in retail properties has caused concern from opposition groups, who said there were inherent risks and called for the cash to be put into housebuilding.
Accounts for the company’s first year revealed a £3.1 million loss, which the board said was down to one-off purchase costs.
David Busby, cabinet member for assets and investments for Babergh District Council, said: “In the short-term, property values may fall but, over the longer term, we expect our quality investments to not only return a generous rental income but also show capital growth.
“The important thing is the income that you’re getting from the rent, which in the case of Cifco, is £1.4 million a year towards council services for our residents.”
More by this authorJason Noble, Local Democracy Reporter