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Councils tap PWLB for £1.3bn commercial property purchases: report

Local authorities have bought £1.3bn worth of commercial property in the past year by borrowing from the Public Works Loans Board, the Sunday Times has reported.

Citing research from property firm CBRE, it said councils used the board’s facilities to borrow at only some 2% to finance 76 deals.

The largest deal was Spelthorne Borough Council’s £360m purchase of BP’s Surrey office campus.

Property purchases have been spurred by the looming end of the grant system in 2020, which has forced councils to be more inventive in how they raise finance.

They buy property for investment under the power of general competence and profit from the difference between the PWLB’s low rates and property yields.

Surrey County Council leader David Hodge told the Sunday Times it was “important that councils have the skills to understand the market”.

The Treasury said borrowing and spending decisions were the responsibility of “locally elected councillors, who are democratically accountable to their electorates”.

Mark Smulian

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