Spelthorne’s PWLB borrowing tops half a billion

Spelthorne Borough Council took its Public Works Loan Board borrowing for commercial property acquisitions over the half billion pound mark in January.

January lending figures from the PWLB show  the authority borrowing £170m in 14 separate loans ranging between six and 48 years in duration.

The cash will be used to fund the purchase of a property in Hammersmith, which was announced last month.

Terry Collier, deputy chief executive of the council, told Room151: “This is part of our ongoing strategy to deliver income to sustain the services to our residents. IT is a carefully evaluated acquisition opportunity and we have done lots of due diligence to understand the risks involved.

“It is relatively local to us—only 14 miles away from our offices.”

In September 2016, the council launched its property acquisition strategy with a loan of £377m from the PWLB.

This was spent on acquiring the BP Campus in Sunbury — believed to be the biggest ever commercial property deal by a local authority.

In September, it took another £48m to buy another office block in Heathrow, while it borrowed £28m in December 2016 for a number of smaller projects.

The government is currently consulting on changes to investment guidance to make councils provide greater transparency about borrowing from PWLB for property investment.

But Collier said that the council will continue to look at  opportunities for further borrowing as property opportunities arise.

He said: “This is an evolving situation and we don’t have a specific target or cap for the time being. Risk is a very important factor – we walk away from more opportunities than we follow through on.”