There has been further speculation regarding Spelthorne Borough Council's financial affairs on which the Council would like to offer some clarification
9 October 2020
There has been further speculation regarding Spelthorne Borough Council's financial affairs on which the Council would like to offer some clarification.
There is suggestion that auditor KPMG will deem that Spelthorne has acted unlawfully by not following rules and regulations relating to financial borrowing and the proportion of borrowing and investments in pursuing this Council's commercial property acquisition strategy. However the Council remains confident in the legal advice it has been given and can state it has fully complied with all legislation and guidance.
The Council can confirm that:
Despite the economic downturn caused by COVID-19, the Council's assets have continued to perform well with successful collection of more than 96% of the commercial rent due for first six months of current financial year (and the balance covered by short term rent deferral agreements with tenants). The Council is only anticipating writing off 0.02% of its commercial rent which was due in the first six months of the year and, to be clear, Spelthorne is not one of the councils considering issuing a "Section 114" notice (public sector 'bankruptcy') or an emergency halt to spend in order to balance its books.
The Council has always been completely open and transparent about these investments and has published its investment strategy on its website together with a list of the investments made and 'frequently asked questions' which explain the Council's approach. Spelthorne has also widely shared the evidence it gave in May 2020 to the House of Commons Public Accounts Committee as part of the Government inquiry on local authority commercial property investments in England.
Our focus has been on soundly managing our commercial asset portfolio to minimise risk and maintain income, to deliver an ambitious housing programme to meet the needs of our residents and deliver regeneration schemes to protect the prosperity of the Borough, which in the face of the pandemic is more important than ever.
Portfolio for Finance at Spelthorne Borough Council, Cllr Buttar, said: "This is still an on-going matter between the Council and KPMG and no conclusions have been reached by either side. However this Council has taken all necessary steps to ensure that it abides by the law in all its actions and we absolutely refute any suggestion that the Council has acted unlawfully. Our legal advice sets out clearly we have strong legal grounds to support our approach."