Wycombe Labour today demanded to know why BCC is borrowing up to £1.7 million to buy an equestrian unit on 125 acres and grazing land at Liscombe Park near Leighton Buzzard.
Wycombe Labour’s spokesperson, Trevor Fowler, said, “Time was, local authorities were all about helping and supporting the community.
Residents paid council tax and the Council provided help to children, the disabled and vulnerable people. It provided libraries and youth workers and refuse disposal and children’s centres. Residents also paid income tax to the Government and the Government gave Councils money for roads and schools.
There was a general understanding that those who could afford it paid more to help those who were in need.
Taxes in; services provided. Books balanced.
But now, the Government is slashing the money it gives to Councils, BCC can’t or won’t raise its Council taxes to compensate and there is a large and expanding gap between the money BCC needs to provide statutory services and the money it get from taxes. Already the Council is £ 173 million in debt.
The answer, according to BCC, is to start trading. The answer, according to BCC’s Cabinet, is to take commercial risks with our money. The answer is to speculate with our money in businesses that might lose money and put the Council further and further into debt.
But since when has BCC been an expert in commercial trading and investment? The long term impact will be debt for future generations. It’s financial madness.”
Robin Stuchbury, Labour’s BCC Councillor for Buckingham, said “We have scrutinised the first of these so called investment opportunities – borrowing up to £1.7 million to buy an equestrian centre and 125 acres and grazing land.
BCC’s own paper says “there must be a strong policy rationale and link to BCC’s strategic plan to justify taking any commercial risk.” It says BCC must ask itself “If the trading activity is not a priority for BCC, why take the commercial risk?”
So questions for BCC
- Where is the policy rationale, or link to BCC’s Strategic Plan or BCC priority in running an equestrian centre?
- When will BCC repay the loan and how much interest is it paying?
- Why is BCC’s Cabinet overriding the concerns of the local member, Councillor Blake?
- What happens if the equestrian centre ceases to trade and/or the rental income ceases? “
Why on earth is BCC investing in an equestrian centre? What sort of Alice in Wonderland world are we living in that the Council is funding horse-riding when families are struggling to survive and our schools are being given away to the private sector?
BCC’s Cabinet on 7 March approved further negotiations to buy the property at Liscombe Park. Wycombe Labour has not had access to the confidential appendix to the paper setting out the case for this acquisition but the public paper says that
- BCC would borrow up to £1.7 million
- It would receive rent from the tenant, who runs an equestrian centre, of £119,000 per annum gross
- It would need to pay back £75,000 p.a. to finance the costs of the borrowing and
- it would need to pay £12,000 to manage the property
This gives BCC a net gain of £32,000 pa. minus management fees and repairing obligations. This is a return of less than 1.9% on its investment of £1.7 million.
The investment is said to give an annual yield of more than 6% (presumably gross) which is the Council’s hurdle for investment.
According to the council’s most recent treasury report (Regulatory and Audit Committee meeting, February), Bucks CC currently has £172.5M of fixed rate debt, at an average interest rate of 5.8%.