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Over the border: Uttlesford sees massive devaluation of assets

News / Tue 27th Feb 2024 at 10:18am

AN Essex authority’s Q3 update on its property portfolio has revealed a devaluation of its assets by almost £7 million over three months, alongside large sums borrowed from other councils across the country from June 2022 totalling £93 million reports the Local Democracy Reporter.

At a meeting of its investment board on February 15, Uttlesford District Council discussed a report of its property portfolio and its position during the third quarter of the 2023-24 financial year, which ran from October 1 to December 31 2023.

The report detailed that the portfolio of assets as retained by Aspire (CRP) Ltd., a wholly owned subsidiary of the council set up to manage its investment in Chesterford Research Park, saw a decrease in its value of £6.9 million during Q3 as opposed to a £6.2 million increase during Q2.

The valuation for Aspire’s total portfolio, which alongside Chesterford Research Park includes Skyway House in Takeley and a regional Waitrose distribution centre in Chorley, Lancashire, now sits at £269.1 million compared with an acquisition cost of just over £250.7 million.

Focussing on Chesterford Research Park in particular, which is home to a number of science and technology companies on the site of what was once a crop protection research centre, the report revealed that Uttlesford District Council has so far loaned Aspire nearly £64 million for acquisition and further development of the park.

This surpasses a previous estimate of approximately £40 million and includes a further £21 million loan agreed by the council last August for the development of a key building and the first phase of a solar farm on the site. The first drawn-down payment of £3.3 million for this project was made in December 2023, with a further loan request expected to be made by Aspire in due course.

Uttlesford District Council finances the Aspire portfolio in a number of ways, including through internal borrowing when it has excess funds to invest, but has additionally borrowed large sums from other local authorities across the country since June 2022. The largest of these sums was received from Cornwall Council on December 5 2023, at a value of £15 million. In total, Uttlesford District Council has over £209 million from other British authorities.

However, local residents have taken to social media to express their concerns over the council’s investments in Chesterford Research Park, with one person commenting in a Facebook group that they “really wish more was explained to us about what is going on, especially with investments. The wall of silence is unhelpful”.

Another said: “It would be laughable if it wasn’t so serious. Chesterford Research Park is the jewel in the investment crown; why have we got financial incompetents playing with millions of pounds of taxpayers’ money?”

LDRS has contacted Uttlesford District Council for comment.

ENDS

  1. https://uttlesford.moderngov.co.uk/documents/s34390/UDC%20Property%20Portfolio%20Q3%20202324%20Report.pdf

Categories:

 Economic development Finance Policy Regeneration

Locations:

 Uttlesford District

Authorities:

 Essex County Council

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5 Comments for Over the border: Uttlesford sees massive devaluation of assets:

Adam
2024-02-27 11:04:08

This is what happens when councils try to play businesses, I expect Harlow council with its similar investments will be headed in a similar direction. Why are councils spending millions on tings which are not statutory requirements, empty the bins, provide schools and social care and stop meddling in everything else

Pete
2024-02-27 13:36:39

Adam what has actually happened? An acquisition of £250.7m was made which is now worth £269.1m. Presumably rental income is being received and jobs being provided by the occupiers. That doesn't see bad to me. This is a very poor article with a headline intended to shock but no substance.

Nostradamus
2024-02-27 14:47:07

Councils have no business dabbling in investment markets, it's a form of gambling with tax payers money. Governments at Westminster have all the levers to generate money needed to raise funding for local government and then pass it down to local district and County Councils.

James Leppard
2024-02-27 18:43:13

Nostradamus, a rather sweeping statement. Some Councils are far better equipped than others to make risk and operational assessments. Your comments re 'investment markets' makes it sound as if they are investing in wheat futures on the Chicago Exchange or trading call and put put options on Bitcoin. You clearly have not gone into any detail. For example, the previous Harlow Labour administration invested in setting up the private company of HTS without adequate management or oversight. The company never generated a genuine profit after allowing for pension contributions paid by Harlow Council. Independent consultants reports confirmed that the Company's performance was well below industry averages and its costs to Harlow Council far too high. That said, the current administration intervened, changed the senior management, professionalised the Board and governance practices. Already we are seeing vastly improved performance and results. There are many productive ways of working constructively with the private sector without incurring undue risks. As mentioned at the beginning, it depends on who is undertaking the business. I certainly agree with Nostradamus based on HTS, that Harlow Labour has absolutely no business in dabbling in anything other than their internal rants about the world order; although to be fair to them, they wholeheartedly supported the purchase of the Harvey Centre negotiated by the Administration.

David Forman
2024-02-29 03:20:00

James Leppard is right about Labour and HTS. The LGA Peer Challenge Review identified that HTS were operating paper-based information systems as a result of Labour's inability to maintain effective oversight and made it very difficult to extract operational data for management intervention. Quite unforgivable in the 21st century.

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