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Concern over Council borrowing of up to £200m

Tandridge District Councillors have agreed to triple the amount that the Council can borrow for property investments to up to £200 million.

Members of the Strategy and Resources Committee, led by Councillor Martin Fisher, approved the increase at a meeting on 14 June 2018. All the Conservatives and Liberal Democrat Councillors on the committee voted in favour.

Only two of the 13 Councillors on the Committee, OLRG's Phil Davies and Independent Kevin Bourne (Burstow, Horne and Outwood) voted against because of their concerns about the size of the borrowing and about the expertise needed to manage it.

To read the papers published by the Council regarding the matter
click here

The money is borrowed by the Council from the Public Works Loan Board where both the amount borrowed and the interest payments are underwritten by Council taxpayers.

The Government has recently warned all Councils about the potential risks of such large investments because it is the Council taxpayer who is ultimately responsible for the loan amount and the interest payments and so pays the price with cuts to services and/or raised taxes should these property investments go wrong.

The Council's first property investment was the purchase, on 25 September 2017, of a freehold shop premises in Maidstone let to a womenswear branch of Marks & Spencer. Shortly after the purchase, it became clear that M & S would be closing the store and that it would need to be re-let in September 2022. If the property can't be re-let or is there is an empty period, TDC will still have to pay substantial loan repayments, business rates, and any costs of maintaining the property.