BOROUGH chiefs could borrow up to £32 million to spend on commercial property which would help fund front-line council services by April 2020.

That is the forecast made in Cheshire East Council’s Medium Term Financial Strategy (MTFS) – which is due to be approved on February 21.

The move would see CEC follow in the footsteps of other local authorities by investing in properties which can generate additional revenue to pay for council services – and it could contribute towards lower tax bills for residents in years to come.

Cllr Paul Bates, cabinet member for finance and communication, said: “The MTFS shows how difficult it is also going to be in years going forward in that those core, front-line services have to be protected.

“What we will look at is ways of investment that can relieve some of the pressure on the council tax payer in Cheshire East.

Knutsford Guardian:

“That’s the whole point of doing this. We would like to be a low-tax authority going forward, and to do that councils have to be more business-like, and investment strategies are the way forward.

“We have to compete with the private sector.”

CEC currently has an investment portfolio worth £7.9 million, according to the MTFS, and it hopes that will be worth £40 million by next April.

Investing to generate revenue is a model which has been pursued by councils across the country – including neighbouring Warrington Borough Council, which spent £211 million on the Birchwood Park business centre in 2017.

However, Alex Thompson, head of finance and performance at CEC, insists the council will balance risk with reward by sticking to the limits it has put forward in the MTFS.

And CEC is not reliant on commercial properties to balance its books – meaning revenue that can be generated by the scheme will be a bonus.

Mr Thompson added: “The investment strategy sets out the parameters and sets out limits. It effectively means that we will balance risk against return.

“But the MTFS is not balanced on a reliance on investment income, so we are taking a very prudent approach that says we have given ourselves the opportunity, we have set our parameters but at this stage, we are not actually relying on that to be able to fund the MTFS.

“That will come over time and improve the current position.”

At the cabinet meeting where the MTFS was endorsed this week, Cllr Steve Hogben, Labour, warned that there will be work to do in future to avoid falling into a funding ‘black hole’.

“There are millions of pounds to be found by means that we are not really sure of yet,” he said.

Knutsford Guardian:

“I hope it is not the case that this is a very moveable black hole that keeps moving away from us because that sometimes seems to have been our hope – that the dreaded day will never come.

“The thing about a black hole is that in you go, and you are never seen again, which is the place where Northamptonshire has gone.”

Northamptonshire County Council went bankrupt 12 months ago.