Home   News   Article

Subscribe Now

Council will turn developer to make money




A council is to generate more money for the public purse by setting up a company that will buy land with development potential.

Newark and Sherwood District Council is setting up the company to try to make up the shortfall in funding it is expecting to see in the coming years.

Funding from central Government has dropped by 30.5% in three years — from £8.5m in 2013/14 to £5.9m in 2016/17 — and council spending fell by £1.2m to £10.8m in the same period.

The council has already bought land on Bowbridge Road adjacent to Newark Sports and Fitness Centre.

It will be used for housing and the council is expecting to get at least a 10% return on its investment.

It is also buying land off Lowfield Lane, Balderton, for £4.62m, which is allocated for housing, and already owns other parcels of land in the district.

It will buy land for residential and commercial developments that will generate revenue that can be invested back into the council.

The council hopes the development company will help to make up its shortfall in funding by the 2020/21 financial year.

It will spend £120,000 on setting up the company but does not expect to need to spend any more on the company before the end of the financial year in March.

Members of the council’s policy and finance committee unanimously supported the proposal.

The committee chairman, and the council’s leader, Mr Roger Blaney, said the council had prior experience of developing the Beacon Innovation Centre in Newark and workshops in the former coalfield communities in the west of the district.

'The potential to transform the income of this authority'

He said: “This is better than letting reserves languish in a back account getting 1% interest. This is something that has the potential to transform the income of this authority for years to come.”

Committee member Mr Tim Wendels said the council could use the new company to add to the housing market, generate an income and help to meet its own housing targets.

Mr Bruce Laughton said: “There is no doubt that this is a change from the traditional way councils operate but it is not a bad thing to dip our toes in the private sector and give our staff a bit of an understanding on how this works.”

Mr Laughton said the council would have to ensure it did not suffer any reputational damage that could come from owning a development company and being the planning authority.

He was told that all planning applications connected to the new company’s developments would be considered by the council’s planning committee.

Mr David Staples, Labour’s spokesman on the policy and finance committee, said the creation of a development company raised concerns but he recognised it as an opportunity.

“It is a line we have had to pursue because of the reduction in central Government funding but it does acknowledge the opportunities that exist within the public sector,” he said.

“The shareholder committee is representing the whole council’s interests and the interests of the electorate in this and it is important that the company operates within a structure that gives involvement to and recognises that it is about our community.”

Mr Staples said it was important to remember the company needed to make a profit in a way that enhanced the reputation of the council.



Comments | 0
This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies - Learn More