Debts R Us
It is very sad to hear that big retailers like Toys R Us and Maplins have failed.
It seems that more and more people are buying goods online these days.
I think it underlines my point about the caution required by local authorities investing in the commercial property market.
Conservative-controlled Bournemouth Borough Council has just borrowed £49 million from the Public Loans Board in order to purchase a retail park, hoping that they can make a profit of some £600,000 a year on the investment.
The risk is that, as units become empty, profits will decline and the council will be stuck with a declining asset value and still have interest to pay on the loan.
I am keeping a very close eye on what New Forest District Council are doing, or plan to do.
The idea of using commercial investments to fund public services is a very risky one.
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I was shocked to find out that the Tory run New Forest District Council is now spending annually up to £700,000 of taxpayer’s money on putting up people in temporary housing, such as Bed & Breakfast accommodation in Travelodge Hotels.