Of little interest

The January report to South Somerset District Council’s audit committee makes interesting reading.

It is especially interesting in the case of investments. Remember that SSDC is trying to plug the hole in its finances, filling the gap where central government grants used to be. They are doing this with a commercial property plan, investing heavily in property and aiming to generate a return of 7% or more.

So how is it all going? The investments made in 2019/20 are still bedding in and many have been bought during the year so we won’t have a clear idea of the full return they are making until 2020/21 year is complete. So it would be unfair to look at those now.

However we can look at the commercial property investments that were already in place at March 2019. Those investments totalled £28.568m at cost.

The total income from commercial investments made by SSDC for 2019/20 is estimated to be £1.16m. Now do bear in mind that this includes some income from investments that were made after March 2019 (they have spent close to £50m buying property since that date).

But let us assume for a moment that all the income anticipated for the year to March 2020, so £1.16m, is from investments made up to March 2019 (ie the £28.568m). That comes out at a return of 4%. This looks as if it is a long way from the 7% target.

And the purpose of the investments was to raise funds to pay for services. So does the gap between the 4% achieved and the 7% target have implications for delivering services for taxpayers?

Our regular readers will know that The Leveller® always goes out of its way to check facts prior to publication. To do this we contact the bodies we are reporting on in the article and offer them the chance to comment and correct any inaccuracies. We did this in this instance too. Unfortunately SSDC chose not to respond to our request. So we can only publish with a cautionary note that we have not been able to get their side of the story. 

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