“BCP could become the best place in the UK or Europe”
BOURNEMOUTHChristchurch and Poole could become one of the best places to stay in the UK, and even Europe, if there is new investment in the area.
Council leader Drew Mellor said the authority should not be afraid to borrow to invest in the future.
He says that with low debt, compared to other boards of similar size, borrowing to invest was a good strategy.
“Our region is absolutely worth investing in…I believe passionately that we can be the best place to live, work, play in the UK and Europe, but we need to invest in it…now is the time to put our place on the map,” he said. said Monday evening during a review and review meeting.
Cllr Mellor defended the tactic of borrowing against the value of beach cabins in the area, forgoing future rents to get immediate payment.
Former council leader Cllr Vikki Slade told the meeting there was widespread concern over what people saw as selling the ‘pride and joy’ of the area with concerns about future agreements for beach hut owners and how maintenance in future years would be carried out.
She described the council’s current financial strategy as “spiv and spin”, saying many felt uneasy, fearing the beach shacks would eventually be left in the hands of an investment company or a company with foreign assets.
Cllr Mellor said this would not be the case, with control remaining in the council’s hands, with the additional initial income available for further investment in the beach huts.
He said if the proposal goes ahead the council would lose annual net payments of more than £3million a year from the huts, but gain a large sum upfront, possibly £54million , which he could then use as he pleased.
“The risk is negligible,” he said, “it’s 20 years of money up front for less cost,” adding later that he was convinced it would be a better service for users of beach huts.
Councilors later learned that the gross income from BCP’s beach huts was £6.1million a year.
Cllr Lesley Dedman said while the arrangement may be common in the business world, the council was dealing with residents’ money. She claimed the council would find it difficult to persuade users of the Mudeford Spit beach hut that it was a good idea.
‘I find this very disturbing…one resident told me he pays for things never, ever and I think that will cause problems when you try to push through that budget,’ she warned.
Cllr Mike Cox, describing the proposal as ‘financial wheezing’, said the only ambitious thing about the idea was to put the council in more debt, without the details that should be needed before a deal is struck.
“We only borrow the salary for the council’s expenditure shortfall…it covers failures to make appropriate savings,” he said.
The committee approved a recommendation asking Cabinet to develop a fallback plan if a change in government regulations prevents the beach hut financing plan from coming to fruition.
A cabinet report for next year’s budget proposes the creation of a special purpose vehicle (SPV), which would be wholly or majority owned by the council. This would then buy the beach huts at market value, possibly with the help of a loan from the council, and go to market to meet the rest of the cost. The newspaper estimates it could give the council £54million, subject to government rules allowing it.
If it goes ahead, the SPV would use rental income to pay off loans, maintenance and repairs, taxes and fees.
The firm’s report says the board could terminate the SPV once the debt is cleared and return the assets to board control or refinance them again.