December 13 2013 Latest news:
Monday, August 12, 2013
Breckland Council’s deputy leader yesterday hailed the multi-million pound acquisition of Barnham Broom Hotel and Golf Club a success after newly-published figures revealed an income of more than £3m since it was bought.
Data obtained by the EDP under the Freedom of Information Act show that since the complex was bought for £8m in 2006 it has made the council £480,000 per full year in rent – a total of £3,345,806 over the seven years.
But despite a rate of return of 5.4pc, the previously unseen figures reveal it could take the council more than 16 years to recoup the £8m through rental payments if the annual rent remains the same.
The purchase was funded by the council’s reserves fund from the sale of its housing stock in 1992, and taken on as an investment.
But at the time there were many who said the decision to spend so much money on a commercial venture was risky and not transparent enough.
Council bosses have always argued that investing the cash back in to property was a sensible use of money as the rate of return was better than the interest paid by the bank.
Breckland deputy leader Michael Wassell acknowledged the move to purchase the luxury complex was controversial but said it was a good use of tax payers’ money.
“We have an obligation to invest the taxpayers’ money as wisely as we can.
“The only other alternative would have been to leave it in the bank where we would be facing a much lower amount of return now.
“We need to work our assets as efficiently as possible, and if that means buying property rather than just leaving it in the bank then that is an option we will continue to look at.
“I challenge anybody to find somewhere they can invest and get nearly 6pc back.”
Council leader William Nunn has emphasised how the council must be entrepreneurial and business-minded if it is to bridge the £3.5m deficit which it faces.
Earlier this year the authority bought the Jaeger distribution factory in King’s Lynn for £1.18m, expecting to achieve an annual return of 12pc per year.