Council sells off more than £71m of property
BBCA council has sold off more than £71m of commercial property to help plug a budget gap.
Somerset Council declared a "financial emergency" in 2023 and said it would sell off buildings including shops and offices mostly bought by former district councils.
The government gave the authority special permission to spend the money raised on running services like adult social care, following warnings it could go effectively bankrupt.
The council made the sales in the last nine months and expects to sell a further £14m of property by the end of March.
It was estimated £80m could be made from property sales in 2024/25 and the council is on track to exceed that.
A meeting of the property and investment executive sub committee heard the authority has assets worth £105m currently on the market, as well as £50m of assets identified to potentially put on the market in 2025/26.
The meeting heard that one property the council had recently sold was the B&Q building on the roundabout in Glastonbury.
Councillors were told the authority continues to get around £14m per year of income from rent across its remaining property portfolio, worth roughly £140m.
Councillor Mike Rigby, Liberal Democrat lead member for economic development planning and assets said: "There is a loss of income we have to deal with, but at the same time on the other side of the balance sheet there is a capital receipt coming in from the sale of these properties.
"We're then able to spend that capital money on day-to-day revenue spending."
The council previously said it could make a £70m loss across its whole £220m commercial property portfolio.
At that time, it owned 48 properties including the M&S building in Yeovil, offices in Bristol, business parks like Street Retail Park, a TK Maxx in Worcester and an NCP car park in Bournemouth.
"We were instructed by the previous Conservative government that we were to sell our property assets, despite the fact they were making a decent yield for the council, as part of the programme of sorting out the council's finances," Mr Rigby said.
"In terms of the programme that we've got, which is to divest ourselves of commercial property, we are moving in the right direction towards that goal," he added.
The former district councils planned to invest money in the properties and achieve a return through rent from tenants, a strategy taken by a number of English local authorities.
The purchases were largely funded by borrowing from the Public Works Loan Board, which the current council is responsible for repaying with interest.
Follow BBC Somerset on Facebook and X. Send your story ideas to us on email or via WhatsApp on 0800 313 4630.