Councillors have given the green light for an innovative way of raising much needed funds for Wokingham Borough Council.
The council will be adopting its own property portfolio strategy as a way of raising revenue after the scheme was approved at this week’s Executive meeting.
This move will see the council borrowing up to a total of £100 million to buy private and commercial properties as an investment, and potentially developing on its own land and assets.
Cllr Oliver Whittle, executive member for finance, said: “Like councils up and down the country we are seeing reductions in central government funding resulting in ever widening gaps and growing pressures on our services.
“We need to look to innovative ways of generating revenue so we can continue providing essential services such as care for the elderly and young, waste collections and road maintenance.
“Investing in property is one way of doing this and would deliver more returns for the taxpayer than are currently available from bank returns.
“We can also look at the wider benefits for the community, such as housing needs, when investing in our own land.”
As part of the scheme an investment protocol will be put in place to ensure every potential risk is assessed before a property is bought by the council.
There will be a case review of each would-be purchase and when it passes that test it will have to go through the appropriate approval process set by the council.
It is proposed that there are two types of investment – development on council owned land and investing in other developments or property.
To mitigate the impact of any uncertainty, the objective is to accumulate a spread of investments across many different opportunities, including a variety of property types, sizes and locations.
“We face severe pressures as a result of central government austerity,” Cllr Stuart Munro, executive member for business, economic development and regeneration, added.
“Despite responding well to funding cuts we still need to find reductions of £20 million over the next three years and there are only so many cuts this council can take.
“Therefore it is essential we explore all ways of raising our own funds to make up for the shortfall from government.
“Any net yield achieved from property investment will provide a direct profit to the council and be made available to help and serve the people of this borough.”