Millions generated by council's Project Enterprise
A project launched by Test Valley Borough Council five years ago to combat a decline in government grants has generated more than £5 million for the authority.
Project Enterprise was set up in 2014 to increase the income generated from the council’s investments and reduce its reliance on the Government Revenue Support Grant.
The project generates rental income from property investments purchased by the authority using cash reserves.
Over the past five years it has seen a cumulative income of £5.7 million, which is £5.2 million more than would have been generated had the council retained cash reserves instead. The latest outturn figures for 2018/19 show it was the project’s most successful in terms of total income, with £1.94m generated.
The project started in 2014/15 and saw a total income of £484,000 generated in its first year. In 2016/17, income topped seven figures for the first time, with £1.3m generated.
The average return on Project Enterprise investments has ranged from 7.2 per cent to 8.1 per cent over the past five years, whereas cash investments have generated less than one per cent per year over the same period.
Finance portfolio holder, councillor Maureen Flood, said: “Making sure that we can continue to provide the best service possible to our residents can be a challenge financially and we are not alone in this.
“We, and other authorities, are having to think outside the box when it comes to financial sustainability and that’s what makes Project Enterprise one of our key successes.
“I am really proud of the work that staff at the council have undertaken to produce these kind of results.
“They benefit the entire borough and mean that we can plan ahead knowing we are more self-reliant as the funding from central government continues to diminish. We want to stay ahead of the game and these latest figures reflect the fact that we are doing just that.
“This income shows that our approach has been hugely successful, generating £5.2 million more than if we had kept our money in cash reserves. This additional income has helped the council protect frontline services and will ensure that our medium-term financial planning keeps taking us in the right direction.”
Investment properties purchased during the project to generate income for the council include Andover Trade Park, a number of housing developments and purchases in Andover and other investments made in both Southampton and Newbury.
As well as investing to generate a rental income, the council has also completed the development of Evolution 50 on Walworth Business Park in partnership with development partner Kier Property.