Last month I wrote in this column about the bizarre situation that Hastings Borough Council has found itself in, where it has borrowed millions of pounds to buy the old Peugeot garage on Bexhill Road to build a supermarket for an international company in order to rent it out to them. I received quite a lot of correspondence about this with some keen-eyed readers even checking the land registry to see if the Council had actually bought the land. I’m afraid they have, it just doesn’t appear on there quite yet.
Through further investigation I can shed some more light on this strange deal. In July this year a company called ‘Tarncourt Ambit Ltd’ bought the Bexhill Road site for £2 million and in only a few weeks sold the site to Hastings Borough Council for £3.5 million.
This is staggering and hard to comprehend. It is difficult to believe that the site including the old Bulverhythe Pub has increased in value so rapidly that it is worth £1.5 million more in September than it was July.
The finance for the purchasing of the land and the construction is all borrowed money taken out on a 50 year term meaning that it will be our grandchildren that will be paying back through their taxes this costly error of the council.
The Leader of the Council has spoken and written at length about the need for the council to make more money through commercial interests, and he is right.However, the desire to make the council more commercial in what it does should not be a license to borrow huge sums of money to then invest in expensive and badly advised schemes with a poor rate of return and ever higher risks. The emphasis should be on the quality of the scheme not the quantity of the borrowing required to make it happen.
Recently, at a Council meeting, the Labour administration scoffed at the Conservative motion to better plan the finances of the Council going forward. The motion required the council to provide a service level for the services it maintains and an appropriate costing for that. At a time where the Council is increasing its spending and headcount but also eating through its financial reserves, it is logical to put in a system that would help the organisation to budget effectively in the future. This proved too much for the Labour Councillors and not one of them supported it.
The current borrowing of the council is now so large it costs £750,000 every year just to maintain the debt. At the current rate of expenditure and borrowing to finance unwise schemes, it looks likely that the Council will run out of money within a couple of years and saddle us with debt for decades.