Lots of councils have borrowed vast sums to invest in now falling in value property assets. So, how are they goin to get out of this?
A council that borrowed more than £1 billion to bet on commercial property may have acted unlawfully, its auditor has said.
Spelthorne borough council in Surrey has built its property empire over the past five years in an attempt to generate income to compensate for loss of government support.
The investments include BP’s corporate campus at Sunbury-on-Thames, office buildings in Slough, Reading and London, and a local shopping precinct.
The council’s auditor, KPMG, has warned that some of its investments could have been unlawful.
Declare the investments ultra vires and thus unlawful and the contract is no longer enforceable……hey, it’s a bit rough and ready but it works.