District council's investments in sites outside Babergh come under scrutiny
Fresh questions have been raised over the investments by two Suffolk councils, after it was revealed that tens of millions of pounds have been pumped into retail sites outside of the county – with a further £25 million set to follow.
New figures published by Babergh and Mid Suffolk district councils show that investment company Cifco, which is jointly owned by the two authorities, has invested £25 million in six assets in the last year, generating an annual income of around £1.4 million.
The investments include a Marks and Spencer store in Brentwood, Essex, a building occupied by Caffe Nero and Wagamama in Peterborough and a business park in Milton Keynes comprising four car dealerships, as well as sites in Norwich and Harlow, Essex.
The councils have confirmed they are set to invest a further £25 million six months ahead of schedule, with the entire £50 million investment portfolio projected to bring in approximately £2.8 million a year.
This has resulted in questions from the opposition about whether such a strategy is acceptable with public money.
Green Party councillor Rachel Eburne, leader of the opposition, said: “The concern that has not been addressed is that many of the high street retailers are suffering at the moment.
“This is public money, so how is that risk being monitored, and how are we being made aware of it?”
Ms Eburne pointed to the well-documented struggles of high street firms like House of Fraser, Debenhams and Poundworld as examples of the risks of making these kinds of investments.
She added: “If they were investing in retail property in Suffolk, you can support that, you can go and use that. But who goes shopping in M&S in Brentwood?”
The matter is set to be discussed at a meeting of Mid Suffolk District Council’s cabinet on Monday.
Concerns were also raised over the level of income being generated. If the value of the investment remained the same, it would take nearly 18 years for the investment to be returned in full.
Conservative councillor Nick Ridley, Babergh District Council’s cabinet member for planning, said spreading the investment reduced the risk, and said 36 out of a potential 46 sites identified were ruled out to make sure they were “thoroughly scrutinised”.
Gerard Brewster, Mid Suffolk District Council’s cabinet member for the economy, added: “Cifco has now been trading for a year and is already generating a significant amount of income from a growing portfolio of investments, which is reinvested into council services, replacing previous funding from the Government.”