Another SSDC purchase
South Somerset District Council has Just spent another £5.95m of taxpayers money on an investment in a veterinary referral hospital. A new fighting fund (we are not allowed to know how much) was agreed at an SSDC meeting behind closed doors last week. The same secret meeting also agreed a newly relaxed set of rules for approving new asset purchases.
The latest acquisition is in Marlow Buckinghamshire. The Ralph was purchased for £5.95m as part of the Council’s commercial strategy.
SSDC describe the aim of the strategy as “to invest in a diverse range of assets and generate income which will mitigate a significant reduction in central Government funding.”
Unfortunately this is not a balanced asset investment portfolio. Nearly all the money is going into one asset type, ie property.
Although this latest deal should return a net initial yield of 7.09%, SSDC are now even more heavily exposed to a downturn in the property market. The referral hospital only opened its doors to the public in February 2019 so as a business is completely untested in the market adding to teh risk exposure of the council.
The 25,550 square foot property began life as a hybrid office and industrial building in 1989 and was occupied by Emerson Network Power. The Ralph then took the lease and spent £3.2M on fitting the site out to a high standard.
Not to mention the £9,000,000 battery they purchased over 6 months ago where they “forgot” VAT was levied and had to borrow an extra £1,800,000 to pay the VAT before HMCustoms and excise would release it from the docks. I understand this £10,800,000 investment is having problems and to date hasn’t stored any electricity, it’s looking like another white elephant.
But as not one of the opposition councillors have pointed out the investment in Opium comprises £9.8m and £1.35m in 2 loans. the total is above the £10m figure that needs full council approval, but the amount has been split? Why are the Conservatives not taking the administration to task over this?