It is proposed that the Commercial Investment Strategy is suspended at the current time due to the increase in Publics Works Loan Board interest rates on borrowing in October 2019 resulting in the income to be generated from commercial investments being marginal; consultation paper from HM Treasury on ‘Public Works Loan Board: future lending terms’ in March 2020 where it is clearly implies the Treasury will no longer allow local authorities to borrow money from the Public Works Loan Board to purchase commercial property if the aim is solely to generate an income stream and current Covid-19 environment where receipt of rental income is uncertain.

In accepting the recommendations, Cabinet will approve and recommend to Council that the Commercial Investment strategy is suspended; and £30m commercial investment property portfolio is removed from the Capital programme and the Authorised Borrowing Limit and Prudential Indicators are revised at paragraph 4.1 of the report.

The subject of the decision:

It was proposed that the Commercial Investment Strategy was suspended at the current time due to the increase in Publics Works Loan Board interest rates on borrowing in October 2019 resulting in the income to be generated from commercial investments being marginal; consultation paper from HM Treasury on ‘Public Works Loan Board: future lending terms’ in March 2020 where it was clearly implied the Treasury would no longer allow local authorities to borrow money from the Public Works Loan Board to purchase commercial property if the aim was solely to generate an income stream and current Covid-19 environment where receipt of rental income was uncertain.

Alternative options considered:

None.

The reason for the decision:

Cabinet considered that it was not financial viable to continue with the Commercial Investment Strategy at this current time.

The Decision:

That Cabinet approves and recommends to Council that:

(1)     the Commercial Investment strategy is suspended; and

(2)     £30m commercial investment property portfolio is removed from the Capital programme and the Authorised Borrowing Limit and Prudential Indicators are revised at paragraph 4.1 of the report.