A little local difficulty

New DCLG figures show Local Authorities borrowed £6.8bn last year, with a large slice of that being used to buy commercial property. Aside from any moral questions about pushing up property prices, Councils face financial risks if they can’t find reliable commercial tenants over the next few decades (some of the loans are on 40yr terms, which is a long time for high street shopping to stay the same) and DCLG has made clear the loans are “not supported by central government”, so Councils will default if they can’t pay. Local Authorities need their property speculation to work out so they can pay for local services, so they’ve got a lot of eggs in one basket.

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