Faced with significant budget cuts from government and little wiggle room to increase taxes, local councils are now spending (and borrowing very cheaply) millions to snap up properties across Lincolnshire and surrounding counties to top up their coffers. Dubbed as an investment in their local communities, councils are hoping to make enough money to free themselves from central government, but it’s unclear how local businesses will reap benefits too — and some are claiming they’re just contributing to a credit bubble.
The City of Lincoln Council made three bold moves in 2018 in a bid to generate revenue outside of council tax and business rates, a big part of which it doesn’t get to keep (for now). First, it bought a hotel building in the city centre for £13 million, which it will lease to Travelodge for 25 years. The building is being developed by York-based S Harrison, which previously bought the land from the council for £1 million.
The money was borrowed from the government’s Public Works Loan Board at much cheaper rates than what’s usually available for the private sector, meaning councils can expect a return of 8% to 11% on money loaned at 2.5%.
Then Luton-based Chariot Investment Holdings scored £6.6 million after it sold two car parks to the city council, which is now leasing them back to the company. And thirdly, housing developers will sell 172 new homes across the city to the council, who will be utilising them as social housing in a bid to free up some of its existing stock.
Across Lincolnshire, West Lindsey District Council allocated £30 million for property investments, and £13 million has already been spent. Controversially, the first three investments were outside the county: a Travelodge hotel in Keighley bought for £2.35 million is hoped to bring a £90,000 yearly return, while two business units in Sheffield (a gym and a lingerie factory) set the council back £5 million.
Councillor Giles McNeill said “we’ve made investments of just shy of £8 million and are generating a return of £598,000 per annum (7.58%), far better than the return of 0.43% we were earning on our investments in 2012.” Later in August, WLDC also spent £6.1 million locally on an industrial unit in Gainsborough.
The leader of South Holland District Council says it’s possible his authority could become a ‘free council’ and throw off the shackles of government control. Councillor Gary Porter said that authorities were unlikely to return to the level of services they used to provide for 30 years. “As soon they stop giving us money they can stop telling us what to do,” he said.
For similar reasons Boston Borough Council is taking a joint £20 million loan with East Lindsey District Council. Councillor Aaron Spencer has been buoyed by the success of a £1 million property fund investment made three years ago, which this March returned £1.111 million – giving the council an additional £111,000 capital. North East Lincolnshire Council also has a spending pot of £6.1 million to invest in properties around the region.
Lincolnshire County Council is setting up its own holding company too, Lincolnshire Future Ltd, which will have subsidiaries for purposes such as property, waste and investment. Having one of the most significant budgets in the region, LCC would be able to borrow much larger sums to invest than any of the districts.
“We’re not really in the business of buying stuff like shopping centres [like Surrey Heath council]; if we do invest, then we will where we can see a benefit for Lincolnshire,” said council leader Martin Hill. Instead, LCC is looking to trade and raise income from authority-run services, but the plans are yet to be finalised.
It’s no wonder fund mangers outbid by councils have been telling the Financial Times that councils are building a credit bubble. Overall across the UK, councils invested £2.7 billion from 2015 to 2017 in property acquisition thanks to the below-market rate loans from the Public Works Loan Board, according to an investigation by The Times — so in some ways, Lincolnshire councils are just catching up on the strategy. Historically, local authorities played an important role as commissioners, investors and guarantors, but it’s unclear how a primarily commercial investment focus will support the local economy in the years to come.
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South Kesteven District Council officers will try to block plans to build more than 200 new homes in Stamford.
The authority’s planning committee will be asked to consider an application from Vistry Partnerships, Cross Keys Developments, Wm Morrisons and New River Retail to build 213 homes on land north of Uffington Road on Thursday.
However, officers have said the proposal is “of poor quality design and layout, falling well short of an acceptable standard” and that it “fails to suitably reflect the gateway location to the town”.
“The proposed density is excessive for the context, resulting in deficiencies in public open space and landscaping provision and in dominant and incongruous buildings at the site entrance which is a key entrance point to the town,” said a report before members.
“Furthermore, the proposal, considered together with the submitted masterplan and design code fails to demonstrate that the wider site allocation would be developed holistically and with provision of suitable connections to the surrounding area and town centre.”
They added the loss of employment land was not “adequately justified”.
How the site would be laid out.
The new homes would include a mixture of one and two-bedroom apartments and two to four-bedroom houses. The plans would also see 136 of the properties (64%) allocated as affordable.
Objections from Stamford’s town council and civic society along with several residents raised concerns over the impact on local infrastructure, noise and light, drainage and highways.
In documents to the council, the applicants said the proposals would contribute “a range of high-quality new homes on a redundant brownfield site, to meet the demand for housing supply in the region”.
They added it would connect pedestrian links, create access to public transport, and incorporate existing green infrastructure.
“It will provide a range of new homes, in a coherent layout and of a style that will create a unique sense of place,” they said.
Around 150 homes in a North Lincolnshire town have been protected from tidal surges and sea level rises after work finished on a £14m flood defence scheme.
The major investment in South Ferriby also protects 3,000 hectares of agricultural land and vital infrastructure, including the A1077 and the Scunthorpe to Grimsby railway line, which carries 20% of the UK’s freight.
It is estimated the work will prevent £248m of potential economic damage over lifespan of the defences.
The project stated in April 2019 and has seen around 3km of new and raised defences built between Ferriby Sluice and South Ferriby village, including embankments, flood walls, de-mountable barriers and flood gates.
The 13-metre flood gates slide across the A1077, closing in 15 minutes, and are the first of their kind in the country to operate across an A-road.
The scheme was completed this summer is being officially by Environment Agency chief executive Sir James Bevan today.
The new defences are now higher than the water level seen in the devastating tidal surge of December 2013. That means local communities are now protected from a similar event.
The height also takes account of climate change predictions up to the 2050s.
| Photo: DC Imaging
Kate Halka, operations manager for the Environment Agency, said: “This marks an important milestone for the community. 150 properties, vast areas of agricultural land, and key infrastructure on which local people and the economy depend are now better protected from tidal flooding and sea level rise.
“We understand the devastation and heartache flooding brings, and have worked tirelessly with our partners to bring this scheme to South Ferriby.
“Of course, it’s impossible to completely eliminate the risk of flooding – people should always make sure they plan for the worst and sign up to receive warnings – but we can manage that risk, as we have here.
“The results will benefit people, properties, livelihoods, the environment and the economy for years to come.”
Further work is now under way to install ‘property flood resilience’ measures to around 20 homes in Winteringham.
Low-lying communities along the Humber are at risk of tidal flooding and sea level rise, with South Ferriby experiencing significant flooding in 1953 and 1987. But it was in 2013 that the most recent event hit, when the most severe tidal surge in 60 years struck the east coast of Britain.
The resulting flooding affected 129 properties in South Ferriby and 13 in Winteringham, alongside 1,000 hectares of agricultural land that took at least six years to recover. A main route – the A1077 – was closed for four days and the CEMEX cement plant was put out of action for a year. The damage is thought to have cost the economy £50bn.
Councillor Sara Haddon, chairman of the South Ferriby Parish Council Flood Protection Committee, said: “Residents of South Ferriby Sluice are delighted that the new defences are now complete. Memories of the 2013 floods are still raw and the new defences mean that they can sleep easy as we approach the coming winter.”
There have been 845 COVID cases recorded in Greater Lincolnshire on Thursday, as the UK passed 52,000 daily for the first time since July.
NHS vaccination data released on Thursday revealed that 1,131,705 doses COVID jabs had now been handed out in Lincolnshire. Of those, 545,844 were second jabs – around 86% of the total 634,453 population of Lincolnshire.
Nationally, a further 52,009 cases have been reported in the UK – the first time above 50,000 since mid-July and meaning there have been nine consecutive days of more than 40,000 cases. A further 115 people have died in the UK within 28 days of a positive test.
The latest COVID stats for Lincolnshire are:
845 new cases of coronavirus in Greater Lincolnshire with 663 in Lincolnshire, 99 in North East Lincolnshire and 83 in North Lincolnshire.
Five deaths were recorded in the government figures with four in Lincolnshire and one in North East Lincolnshire.
Hospital data showed three furthers death at United Lincolnshire Hospitals Trust.
NHS vaccination data showed 5,340 doses given out in the past week, 1.14% doses fewer than the previous week’s 5,402.
Some 567,458 people over the age of 18, and 18,403 under 18s have received their first dose, while 544,271 over 18s and 1,573 under 18s were double-dosed.
In North East Lincolnshire a total of 217,641 doses of the vaccine have been administered, with 104,865 second doses.
In North Lincolnshire, 243,725 doses have been handed out, with 117,277 being double-jabbed.
Lincolnshire’s coronavirus cases up to October 21. | Image: GOV.uk
Prime Minister Boris Johnson this afternoon said the UK was in a “much better position” than last year but added the country must “fortify” further.
“The most important thing people can do is just get that booster jab – when you get the call, get the jab,” he said during a visit to Armagh.
“The numbers are high, we see can see what’s happening, we can see the increase, now is the time to get those booster jabs, and to vaccinate the 12-15 year olds as well.”
He said the government was “sticking with our plan” among calls to move to Plan B – which would include mandatory face coverings in crowded and enclosed spaces.
To find out more about where you can get your booster jab and who’s eligible. Click here.
Coronavirus data for Greater Lincolnshire on Thursday, October 21
131,118 cases (up 845)
87,049 in Lincolnshire (up 663)
21,493 in North Lincolnshire (up 83)
22,576 in North East Lincolnshire (up 99)
2,384 deaths (up five)
1,742 from Lincolnshire (up four)
328 from North Lincolnshire (up one)
314 from North East Lincolnshire (up one)
of which 1,433 hospital deaths (up three)
879 at United Lincolnshire Hospitals Trust (up three)
44 at Lincolnshire Community Health Service hospitals (no change)
1 at Lincolnshire Partnership Foundation Trust (no change)
509 in Northern Lincolnshire (NLAG) (up one)
DATA SOURCE — FIGURES CORRECT AT THE TIME OF THE LATEST UPDATE. POSTCODE DATA INCLUDES DEATHS NOT IN HEALTHCARE FACILITIES OR IN HOSPITALS OUTSIDE AUTHORITY BOUNDARIES.
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