Somerset approves plan to invest £100m into commercial assets

Somerset County Council has approved an investment plan as part of their next budget that could see £100m of capital funds invested into commercial assets

Faced with a budget gap of £28m over the next three years, the authority says they need to ensure their future finances are ‘sustainable’ in the face of further cuts from central government.

They say the strategy will now be developed, establishing criteria for selecting investments and processes for decision-making and appraising them.

According to the council, options for investment include assets such as property and land, businesses and investment funds.

David Fothergill, leader of the council said the way local authorities are funded is ‘fundamentally broken’.

‘Too much of this budget’s solutions have relied on one-off, unpredictable central government funding,’ he added.

‘But thanks to a lot of hard work we have seen great performance in key areas and can look to the future with more confidence, ambition and a renewed focus on prevention.’

‘This is a budget that looks after the here and now but also looks to the future.

‘Despite the huge financial pressures we continue to face, we have managed to set a balanced budget for the coming year and agree steps that will prepare us for the years that follow.’

Councils investing in commercial property has been a growing trend in recent months.

Last August Shropshire Council raised eyebrows when they spent £51m of their capital budget on the Darwin, Riverside and Pride Hill shopping centres in Shrewsbury.

Other councils including Bolton, Liverpool and North Somerset have also spent tens of millions investing in commercial property, with the hope they can pump the income generated back into depleted public services.

Read New Start’s report on whether councils are gambling on their future by buying shopping centres here.