The Isle of Wight Council has decided to stop buying commercial properties on the mainland after the previous Conservative administration spent over £35 million in 2018 on nine units on industrial estates in Salford, Oxford, Kent and Southampton.
Although the investments gave a net return (including debt costs) over 4 per cent in 2019/20, falling to 2.64 per cent in 2020/21, using money borrowed from the government, the Alliance Group, now running the council, has discontinued the policy.
Councillor Chris Jarman, cabinet member for strategic finance, corporate resources and transformational change, said: “In November 2020 the UK government made it clear that any future expenditure on assets must have a direct policy purpose (i.e. for local service delivery).
“The last administration chose to invest on the mainland and to award major contracts to mainland companies.
“The new Alliance administration is absolutely committed to investing in the Island with additional funds that become available and also through our regeneration activities.
“While it is essential that we retain the principle of ensuring value for money, this administration will be increasingly mindful of including the benefits of supporting the wider local economy in our evaluations and financial analysis.”