Property Investing Gone Wrong – Council Lose £200 Million In Bad UK Property Investments

Where - ? is the Govt for allowing Councils to do this ( and its been going on for Years ! )
Its not good enough for Govt to send in Overseeing - inspectors to do an 'International, or rather, National Rescue ' AFTER Councils have squandered Tax-payers money.

Its plain fraud on the Council Tax payers.

They don't care whether it is a viable investment or not. They want to own everything so we can be happy. Simples!

I worked for a LA a few years back, and there was a staff conference where the Chief Executive explained that the government's funding to local authorities through the rate support grant was being axed. In future local authorities would need to generate their own income to cover the cost of the services they provide. To assist them the government would offer low interest loans. The CE advised that the Council had decided to invest in commercial property in the High Street that would generate a regular income. Even at the time it sounded a bit risky, as high streets were already suffering, but with the benefit of hindsight I'm wondering why local authorities were not being encouraged to invest in and develop social housing, an area they do have expertise in and which most people would agree is desperately needed. Local authorities can be blamed for acting outside their remit but it strikes me that their hands have been forced and that really the government is itself accountable.

Reply to the comment left by at 20/12/2021 - 14:07
I could not disagree more!
Until you face up to the fact that you do not know exactly what you are doing, and in the case of local councils that is utterly impossible due to the calibre of staff and their insurmountable systemic problems, then the situation is utterly hopeless.
These people cannot run a car park or design a basic web site.
The idea of them running a business using their own judgement is utterly absurd.
They need to make passive investment with minimum risk or reduce their core activities, but I have many examples over many years that they can even get that right.
The idiots at a West Country council invested in very old buildings with severe listed building restrictions that they could not then rent out as the overheads from using them were far too high and so no business would touch them. So the council idiots moved into the buildings themselves!
Result massive additional burden on the tax payer.
Water finds its own level and if you keep throwing good money after bad, just like the NHS, the result will, inevitably, be bigger failures than ever.
Just because there is a need for something, does not mean that the need will ever be met.
Meanwhile the council Chief Exec’s continue driven by their real motivation, which is to maximise their own absurdly high income.
If this sort of activity was carried out by a real business, the business would simply contract.
That’s the grown up bottom line.
The reason that councils have steadily had their funds restricted is that they are just absolutely useless at what they do whereas an expanding business (tax payer funded NHS aside) provides consumers with what they want to pay for.