Council looks to sell £9m golf club at a loss 13 years later
- Credit: Copyright: Archant 2018
A council is selling a golf club it spent £9m on at a loss 13 years later, raising questions about local authorities investing in commercial property.
Breckland Council has agreed to sell Barnham Broom Golf and Country Club for £6.5m to the business' tenants who would continue to run it as normal.
The council spent £7m buying and another £2m renovating the property in 2006.
But the council said it would make a £2m profit when the money it had collected in rent was added to the price it was selling it for.
The sale was agreed in October last year, but has not yet happened and details are only now coming to light after documents were leaked to this newspaper.
The documents also revealed that a surveyor for the council estimated the property was worth £3m on the open market - a huge fall in its value since 2006.
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Labour councillor Harry Clarke said the figures were 'disturbing'.
'This reported valuation throws further questions on the original valuation and decision,' he said.
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Councillors voted to buy Barnham Broom in May 2006 without being told what they were buying.
They were told the council needed the cash for an 'excellent investment opportunity' and they should 'grab this opportunity with both hands'.
Leader William Nunn said at the time the purchase was 'in the best interests' of taxpayers in Breckland.
Independent councillor Pablo Dimoglou, who urged the council to make details of the Barnham Broom deal public last year, said: 'Breckland residents should be entitled to know what is happening with an asset which forms a huge part of Breckland's total investments.
'I do not find it acceptable that the ruling Conservatives can agree fundamental issues in private meetings.'
It was discussed in private at the council's cabinet in October last year because of commercial confidentiality.
Breckland's chief executive Anna Graves said: 'Working in a business-like way brings significant benefits to local people but means we sometimes can't share as much information as we would otherwise like.
'This is because it would stop us being able to secure the best business deal on behalf of our residents, could impact the business of other parties that want to work with us, or affect the private business activities of our commercial tenants.'
Breckland has £45m invested in properties from warehouses to leisure sites which give it a return of about 7.8pc a year.
The leaked council report said the money it got from the Barnham Broom sale would be reinvested in other properties as part of a 'refreshed investment strategy' but added that it would still look for 'speculative opportunities'.
It said the council's investment strategy would need a more 'interventionist approach' in future by overcoming infrastructure issues to open up employment sites.
The council said unlike Barnham Broom it would invest in local assets with returns invested in Breckland.
Anna Graves said: 'Income we receive in rent from these investments can be ploughed into providing good quality services and means we can keep local council tax among the very lowest in the country.'