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Letter: While GBC Has to Close Toilets SCC Shrugs Off Multi-million Investment Loss
Published on: 19 Jan, 2022
Updated on: 19 Jan, 2022
Debenham’s Winchester, now closed. Google Street View
From: George Potter
Lib Dem county councillor for Guildford East and borough councillor for Burpham
Surrey County Council loses £49.5 million and doesn’t bat an eyelid, while Guildford borough is forced to close toilets to save thousands Guildford Borough Council is currently consulting with the public on closing some public toilets to save £65,000 to make its budget work.
The R4GV/Lib Dem administration have gone out of their way to make clear how much they regret the necessity of making this cut but that they have no alternative after having been battered with additional costs (along with reduced revenue) after almost two years of the Covid pandemic.
Meanwhile, it’s a different world at Surrey County Council where, at this week’s council meeting, the Conservative administration shruggingly admitted to having lost a total of £49.5 million of taxpayers’ money across just two investment properties. This might just be peanuts in the eyes of Surrey Tories but to us ordinary people in the towns and villages this is OUR money that is being flushed down the drain.
Since they were bought by SCC in 2017 a retail park in Malvern has had its value written down by £40 million, and Debenhams in Winchester has had its value written down by £9.5 million (in addition to providing no rental income whatsoever due to Debenhams being in administration).
That’s £49.5 million of taxpayers’ money which has disappeared into thin air from just two investments in SCC’s ill-advised foray into purchasing masses of retail property at the height of the market.
At the time of this spending spree, there were plenty who advised about the risk of SCC’s property investment strategy, which disproportionately invested in the retail sector, creating an unbalanced property portfolio which would always be vulnerable to market shocks.
Well, a market shock has arrived and, as a result, SCC has lost almost £50 million. But, shockingly, when asked (by Surrey Lib Dem group leader Will Forster) whether they felt these investments represented good value for money, Surrey Conservatives dodged the question and spoke of their hope that the government would bail out the high street and pointed out that one of the properties was still providing (reduced) rental income and that investments might go up in value as well as go down.
This, more than anything else, illustrates the vast gulf between Surrey’s boroughs and districts and the profligate Conservative-run county council. Here in Guildford councillors agonise over saving a few tens of thousand pounds here or there in order to balance the budget, whilst the Conservative administration at County Hall loses tens of millions of pounds on a single investment and doesn’t bat an eyelid.
If the borough councils received just a fraction of the millions that the county council wastes each year then I’d wager that no towns would be looking at closing public loos to save thousands of pounds here and there to eke out the funding left to protect more essential public services for those most in need. It’s worth remembering that 87 per cent of our council tax goes to Surrey County Council. I for one am unhappy this is used to pay for their profligate property shopping.
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Responses to Letter: While GBC Has to Close Toilets SCC Shrugs Off Multi-million Investment Loss
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Jim Allen
January 19, 2022 at 12:59 pm
The investment of any council monies outside the political boundaries of their electorate has always been a mystery to me. Furthermore if they have spare money are our council taxes too high?
John Perkins
January 19, 2022 at 1:51 pm
Well said, George Potter. I fully agree.
SCC want to take over as the sole council body for the area. How much more they could waste if that were the case.
Valerie Thompson
January 19, 2022 at 2:24 pm
This whole business is a disgrace. GBC needs to think again and maybe refuse to send our rates to SCC unless the county council will pay for the continued availability of all the lavatories that are threatened with closure.
Perhaps these councillors have never travelled to countries where public loos are not a matter of essential hygiene. I warn the public to be careful when using car parks, open spaces, woodland, such as that at Stoke Park, public gardens, or anywhere that could be used for “wild weeing or public peeing” because it will happen. The whole idea is disgusting.
Georgina Grant
January 19, 2022 at 8:06 pm
Clean public toilets are a necessity. Women, in particular, need public conveniences. Some suffer from a weak pelvic floor and incontinence, others need to change sanitary products regularly.
Although some larger stores have facilities, these are never on the ground floor and cannot be accessed in a hurry.
K White
January 20, 2022 at 1:44 am
I understand the points being made but there is no loss until the assets are sold. These properties have been revalued at less than cost. Time will tell if there is an actual loss.
George Potter
January 20, 2022 at 4:48 pm
Whilst this is correct, an unrealised loss is still a loss. If I buy £1,000 of shares and they lose half their value then I’m down £500.
It may be that, if I hold onto them, the shares will eventually recover their value and I’ll be able to sell them for what I originally paid for them. But normally when you invest in something you hope that it will increase or maintain its value rather than plummeting like a stone forcing you to wait years in the hope that the value might someday recover (if indeed it ever does).
And the other pertinent point is that Surrey County Council did not just buy these properties with cash it had sitting around doing nothing. It borrowed money to make these investments, meaning that it is left paying interest on the amount it borrowed whilst being left owning buildings which are now in negative equity.
So I rather do think that there is no way to look at this other than as a loss. Maybe in two years time retail property will soar in value, in which case I’ll eat my words, but until then we have £50 million of taxpayers’ money which has vanished into thin air.
George Potter is a Lib Dem county and borough councillor.
Sue Doughty
January 20, 2022 at 10:02 am
While I accept that councils have been forced to look for income from other sources, the incompetence of Surrey has been staggering with no income being generated. I’m neutral about where the investment should be made but I fail to understand how such sums could have been invested by people who appear to lack any expertise in this field.
Sue Doughty is a former Lib Dem MP for Guildford