But here in Michael Gove’s back yard of Surrey Heath, it also holds the key to the financial struggles facing the local council.
The House of Fraser building and the shopping centre were bought by the council for a combined total of £113m in 2016. Funding was tight and the purchase, paid for by borrowing, seemed a way of regenerating the town centre and producing an income stream.
Seven years on, with high streets across the UK struggling, compounded by the Covid pandemic, the two sites are thought to be worth £33m – 70% less than the purchase price – while rising interest rates mean the cost of servicing the council’s debts has increased.
Because governments are shit at investing. QED.
Of course. Mazzonomics says that these same people should be decinding upon all investment in all new technologies. Mazzo, that is.
They’re not really a government, just a bunch of clueless, wannabe politicians playing with other people’s money. Their level of comprehension is akin to a budgie that keeps attacking the other budgie in the mirror.
Local councils all over the country have invested billions in commercial property and they fucked it all up. Even before the hike in interest rates had hit values, they’d already picked losers every single time. A favourite tactic was pay top dollar for a shitty shopping centre, pay more to tart it up and then make life so difficult for motorists that no one ever came into town to shop.
During the time that councils have been spaffing borrowed money (for which we’re all on the hook) on commercial property, they have been wringing their hands about the lack of social housing and blaming Fatcher and right to buy.
I dread to think how much Canterbury Council have lost on this: https://www.kentonline.co.uk/canterbury/news/popular-shopping-centre-bought-by-160104/
A response to the question how did the fool get the money in the first place, the full saying is:
A fool and the tax payers’ money are soon parted.
A favourite tactic was pay top dollar for a shitty shopping centre, pay more to tart it up and then make life so difficult for motorists that no one ever came into town to shop.
Yarp.
See also: threatening to close all the leisure centres and swimming pools out of malice. (It’s never the LGBTQ, Net Zero or Diversity shit that gets deleted from the budget)
The Guardian says:
Swimming pools are at risk of closure nationally because of high energy costs,
So increase ticket prices by 50p a head.
These council pools are usually full of paying customers – why are councils refusing to try the simple and easy things that would help avoid closures and job losses?
Because they don’t want to.
and leading sports bodies have called on the government to include them and other leisure services in its energy discount scheme.
13 years of Conservatives and we’re reduced to pathetically begging for leccy like people in other shithole countries do.
https://www.bbc.co.uk/news/uk-england-devon-67103260
The people who come out of the woodwork to defend the swimming pools are often very revealing. Because often, not ten minutes before, you could hear them talking in high fever about the possible collapse of civilisation due to climate change and how absolutely everything must be done to prevent such a cataclysmic event. Yet the reason swimming pools have massive energy bills is that heating that much water takes a massive amount of energy. You want to cut UK energy use in the slim hope this means China will do the same? Then shutting the swimming pools down would be an excellent place to start. And if you think they should get a free pass… Then maybe you’re not so worried about climate change as you were making out.
See also the many politicians who argue “it’s essential evil capitalist businesses use less energy to stop them destroying the planet… But heavy industry, the ones who use the most energy but inconveniently have lots of jobs from a class that traditionally votes for me and concentrated in my constituency, should get a special exemption.” Again, very telling.
Steve,
“So increase ticket prices by 50p a head.
These council pools are usually full of paying customers – why are councils refusing to try the simple and easy things that would help avoid closures and job losses?”
Well, you say that, but the problem is that they often aren’t full of paying customers. A lot of time on weekday evenings after 6pm is swimming clubs, swim schools, or they close for an evening, or they close at 8pm.
Like the council had an unlimited swimming card and it was slightly cheaper than Nuffield, but it meant figuring out which pool on which evening I could go and have a swim in, because of all this bullshit. Where Nuffield (and every other leisure club) makes sure it’s open for general swim swimming after 6. They do all the other stuff before then. It’s actually a good bit of maximising use as not many adults want to swim before 6, so use it for the kids to have lessons.
WB – here’s what my local council is doing:
“We’ve tried nothing and we’re all out of ideas, so pool’s closed (but we still have money to send you a sixth ‘recycling’ bin while hiring more ‘diversity’ managers obvs). PS – fuck you.”
We should aspire to be as wealthy as Britain used to be, in 1973.
From Arthur’s link:
Commercial property owned by Torbay Council has lost £37m in value while the portfolio continues to earn millions of pounds in rent, it says.
Only if they try to sell it as commercial property which nobody wants. I’ll bet they could get a small fortune if they sold it without outline planning permission for decent housing.
In my local council it was an explicit policy written down in black and white to get rid of the old market buildings with low rents and replace them with new sparkly buildings with high rents, knowing beforehand that the previous tenants would not be able to afford to move into the new buildings.
@ jgh
Either you live in Huddersfield/Kirklees or there is another council with the same shite idea – https://www.examinerlive.co.uk/news/west-yorkshire-news/huddersfields-queensgate-market-plans-explained-27000527
There was a brief period when Rochdale council decided out of town warehousing was the way to bet, even better if cold storage, and when Brexit arrived and storage was desirable the portfolio looked good.
But they went and fecked it up by investing/spending their money on town centre projects.
For a year or two they could have been contenders.
Don’t let people bet with other peoples money.
FT Alphaville from back in June;
https://www.ft.com/content/05856037-ea52-42ed-bfca-19eb42a3fc9f
Basically, LA outstanding debt to the Public Works Loan Board for all the commercial property punting.
Not pretty.
John Plender has written several FT articles in recent years about LAs spaffing borrowed money on stupid commercial property projects.
MC,
“Local councils all over the country have invested billions in commercial property and they fucked it all up. Even before the hike in interest rates had hit values, they’d already picked losers every single time.”
What gets me is how easy it was to spot these losers. There was nothing in any data about retail that suggested paying big money for shopping centres. You wanted a big discount to account for the decline over the next decade.
But, you know, about 20% of people vote for their councillors. People care more about the football transfer window than who runs local services and spends a ton of their money.
I joined a private health club because the swimming pool is always available when I need it. The council run pools were often closed for other activities and didn’t open early enough for me to swim before work. The water was always too warm at the council run pools. At the private pool the water takes your breath away when you jump in, once you are swimming though, it’s much better than having it so warm.
This is nothing.
Several German councils got truly farked by borrowing in Swiss Francs, back when you got 1.6 to the Euro. Nice low interest rates, you see.
In your own UK back yard Tim?
Not looked recently but ca. 18 months ago iirc BANES (Bath) council were going down the toilet fo=r millions in unwise retail property “investments” ?
What chance bonuses have been trimmed?
More than few UK LA’s got buggered chasing high rates with Icelandic banks.
Heating Swimming Pools
a: Allow a data centre to be built above, beside it
Or
b: Build an EV only underground car park under pool