The Tory-run County Council this week has bought the freehold to two
properties it currently rents for £45 million. As this was not in the
County’s budget the County Council has had to borrow the money over a
20 year term at a 4% interest rate. The County Council is limited on
how much it can borrow and because of this purchase has had to
increase its borrowing cap.

This purchase comes at a time that the County is consulting on what
services and budget it can cut for next year’s council tax increase.
In the County’s own documentation they suggest a mere £5m return in 20
years time.

Chris White, Liberal Democrat Opposition Leader, said: ‘This decision
was taken over a month ago in secret. We were surprised that at a time
when the council is talking about hard times and difficult budgets
that money can be so easily splashed around on buying property for a
possible, and by no means definite, financial saving a long way in the
future.

‘We have watched bankers splash around cash like this over the last
few years and look where that got us. It is a shame that this was not
borrowing for projects from which residents would see real, tangible
benefits – like improving the state of our roads.’

Note:

The two properties are Farnham House and Robertson House, Gunnells
Wood Road, Stevenage

£45m is the equivalent to £45 a head of population in Herts

The interest rate is variable so costs of borrowing may rise