Whitehall officials fear that councils, like our very own, who bolster their income by ploughing borrowed millions into offices and other developments, are putting their finances at risk.
Tunbridge Wells Borough Council has recently invested in restaurant premises, apartment blocks and other developments, and is looking to borrow £84m (yes folks, the cost went up for a second time in a week) to build council offices and a new theatre.
Councils are braced for a budget crackdown on their exploits in the commercial property market. There are mounting Government concern that investments could result in a funding crunch for local services, since a crash in property values could plunge stretched local authority balance sheets into crisis.
The Chancellor is expected to unveil these tough new rules on council investing next month. This is in advance of the 6 December Full Council meeting, where Tunbridge Wells Borough Councillors will vote on proceeding with the Civic Complex.
TW Alliance has written to the council leader, David Jukes, to ascertain what impact he expects this change in Government policy to have on the council’s ability to raise millions for the Civic Complex, and what contingency planning is in the business plan for the project to address this. If we do get a reply, we shall let you know. But don’t hold your breath.