Councils have spent more than £800m on the purchase of UK shopping centres

[Democorruptcy]

 

Quote

Local councils have spent more than £800m on the purchase of UK shopping centres over the last three years.

In many struggling town centres, these big properties have become something of an unloved asset by investors.

Buyers are thin on the ground. But councils have been stepping in and acquiring them.

According to the commercial property consultancy Knight Frank, since 2016, councils have snapped up 26 shopping malls - 10 this year alone.

The council isn't using council tax or money from existing budgets, which have already been slashed by some £155m over the last seven years. It's borrowed the money. Like other authorities, it's able to secure loans at far cheaper rates than the private sector.

Councils have been pouring record amounts of money into all sorts of commercial property, to generate new sources of income to help fund services.

Bolton has borrowed a total of £100m for its town centre fund as part of a wider £1bn plan to regenerate the town centre.

https://www.bbc.co.uk/news/business-46625912

 

The last budget saw the removal of the council borrowing cap, so this trend can only grow. Councils can add a few residential units to shopping centres to justify the borrowing. If the cost of this cheap borrowing increases, it's going to be carnage. Councils borrowing money to try generate income, high street dying, not enough income and the outgoings rise? Councils go pop but no doubt some bankers will make plenty of money, with the governbankment stood behind the council's debt.

 

 

[Chewing Grass]

6 minutes ago, Democorruptcy said:

 

The last budget saw the removal of the council borrowing cap, so this trend can only grow. Councils can add a few residential units to shopping centres to justify the borrowing. If the cost of this cheap borrowing increases, it's going to be carnage. Councils borrowing money to try generate income, high street dying, not enough income and the outgoings rise? Councils go pop but no doubt some bankers will make plenty of money, with the governbankment stood behind the council's debt.

Its not only shopping centres/malls they have spent even more on buying up business parks.

See our very own Council Debt Madness thread.

£200 Million on one purchase is not unusual.

 

[Democorruptcy]

30 minutes ago, Chewing Grass said:

Its not only shopping centres/malls they have spent even more on buying up business parks.

 

In the last budget Hammond said that all the NHS PFI contracts would be honoured but the governbankment wouldn't be doing any more. It seems that the money men have switched target from NHS to councils?

[sarahbell]

22 minutes ago, Democorruptcy said:

In the last budget Hammond said that all the NHS PFI contracts would be honoured but the governbankment wouldn't be doing any more. It seems that the money men have switched target from NHS to councils?

https://www.manchestereveningnews.co.uk/news/greater-manchester-news/greater-manchester-councils-spent-500m-14774022

 

Greater Manchester councils have spent £500m buying out the failing Viridor waste and recycling contract

The 25-year PFI contract was signed less than a decade ago - this is how much it is costing us to get out of it


Bound to be hundreds of PFI contracts we'll end up sorting out.

 

Greater Manchester Waste Disposal Authority’s £500m buy-out is being funded by around £300m in borrowing from the region’s combined authority - via Oldham council, Manchester council and the region’s pension fund - along with £120m government borrowing.

In 2014 Lancashire County Council terminated its own £2bn, 25-year PFI with Global Renewables Lancashire Limited (GRLL) and construction firm Lend Lease, while Essex council has lately been locked in a battle with PFI partners Balfour Beatty over issues with the county’s new waste plants.

 

 

Probably enough to fill a whole blog :-/

[sarahbell]

If there were any real journalists out there they'd be hammering this shit out properly.

[Chewing Grass]

Take it out of Gordon Browns Pension.

In 1992 PFI was implemented for the first time in the UK by the Conservative government of John Major. It immediately proved controversial, and was attacked by the Labour Party while in opposition. Labour critics such as the Shadow Chief Secretary to the Treasury Harriet Harman, said that PFI was really a back-door form of privatisation (House of Commons, 7 December 1993), and the future Chancellor of the Exchequer, Alistair Darling, warned that "apparent savings now could be countered by the formidable commitment on revenue expenditure in years to come".

The use of PFI was very limited until 1997 but became widespread under the New Labour government.

Two months after New Labour took office, the Health Secretary, Alan Milburn, announced that "when there is a limited amount of public-sector capital available, as there is, it's PFI or bust". PFI expanded considerably in 1996 and then expanded much further under New Labour with the NHS (Private Finance) Act 1997.

https://en.wikipedia.org/wiki/Private_finance_initiative#Development

[Democorruptcy]

I think Tony Bliar called it "The Turd Way"?

[sleepwello'nights]

Property is an important component of any investment portfolio. 

Once the LAs have purchased a large enough element of commercial and industrial property perhaps they will turn to residential property. That will lead to more council houses, which is what a significant proportion of posters on TOS (and maybe on here) say is desirable. 

[sarahbell]

9 minutes ago, sleepwello'nights said:

Property is an important component of any investment portfolio. 

Once the LAs have purchased a large enough element of commercial and industrial property perhaps they will turn to residential property. That will lead to more council houses, which is what a significant proportion of posters on TOS (and maybe on here) say is desirable. 

How?
They'll have no money coming in to pay the mortgages on the commercial and industrial places.

There are no stories of "UK business homeless this year" or "Demand for business properties rises exponentially as businesses forced to operate in the open air" 

[macca]

The only thing on the way are council tax rises to pay for all this stupidity and corruption.. 

Along with bankrupt pensions.. so reductions to pensions.. 

Remember we have to pay 100’000’ssss of £’s to get the most intelligent people in charge of our councils.  😂😂😂😂

Or my mate Dave.. brown envelope.. 

They are as thick and greedy as they come.. 

[sleepwello'nights]

6 hours ago, sarahbell said:

How?
They'll have no money coming in to pay the mortgages on the commercial and industrial places.

 

Any shortfalls or losses will be made good by the taxpayer. How can they lose?