Prime minister Boris Johnson declared he was impressed with Spelthorne Borough Council’s initiatives during a visit to one of the authority’s out-of-borough commercial property investments.
The authority’s well-publicised borrowing spree from the Public Works Loan Board (PWLB) to fund £1bn of commercial property investment has caused controversy in some quarters of central government.
3rd LATIF NORTH
March 25th, 2020, Manchester
Council treasury investment & borrowing
However, during a visit to the Charter Building in his Uxbridge constituency this week, Johnson had warm words for Spelthorne’s leader Ian Harvey.
Writing in a LinkedIn post, Harvey said: “It was a pleasure to welcome prime minister Boris Johnson to one of our investment properties in Uxbridge today. He was impressed with our initiatives.”
Spelthorne acquired the Charter Builidng in August 2018 as part of a three-office portfolio in the Thames Valley for which it paid £285m.
Johnson, along with Spelthorne MP and business secretary Kwasi Kwarteng, was addressing a meeting of female entrepreneurs in the office, and Harvey travelled to the building to greet the prime minister.
Speaking to Room151 after this week’s meeting, Harvey said he would not like to breach the prime minister’s confidence by expanding on details of their conversation, but said: “He certainly didn’t castigate us.”
“People recognise while we might be big spenders we are one of the more prudent authorities. Other councils might make a bigger mess with smaller loans.”
In January last year, speaking before Parliament’s Housing, Communities and Local Government Committee, MHCLG permanent secretary Melanie Dawes said: “There are only one or two councils that we are aware of that are really pushing the envelope beyond the guidance we updated recently with CIPFA.”
However, she refused to confirm that Spelthorne was one of these councils, saying only that the council “certainly has very high borrowing rates”.
In February last year, Spelthorne officially called time on its controversial programme of borrowing from the PWLB to fund commercial property investment.
A capital strategy document said that the authority had “achieved our objective of significantly boosting our income to support provision of services”, and will now focus its capital strategy on investment in affordable housing and regeneration.
However, Harvey told Room 151 that the council would still consider further commercial property purchases “if the right deal came along”.
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