Title

NATIONAL AUDIT OFFICE

It makes good sense to diversify income

Some of the commentary on commerciality implies councils are going into these investments recklessly, and that is simply not the case, says Simone Hines. Continuing to be creative and innovative with council finances is going to be vital, she adds.

The commercialism debate rumbles on with the publication of the National Audit Office's (NAO) recent report and the Public Accounts Committee hearings in May. The reasons for councils making commercial investments are well rehearsed. We've long been encouraged to be more self-sufficient. Many district councils no longer receive Revenue Support Grants and have looked for new income streams.

These investments enable the risks to be managed at a local level and provide some protection from the shocks of reduced Government funding. The current pandemic has shown there is an over reliance on the main sources of income, and it makes good financial sense to diversify income. It should also be remembered that this is not new to us. Local authorities have invested in property for many years and there are legal powers.

S151 officers have a legal and professional duty to ensure the necessary due diligence has been undertaken prior to making a commercial investment – or any investment for that matter. Some of the commentary on commerciality implies councils are going into them recklessly, and that is simply not the case.

The current PWLB consultation muddies the waters even further by proposing that any authority undertaking commercial investment will not have access to PWLB. This risks undermining the prudential framework and local decision making. It may force s151s toward using riskier finance sources.

The NAO report referred to £6bn of commercial property acquisitions, but there may be wider reasons for these – such as town centre regeneration.

A handful of councils may have pushed the current prudential framework to its limits, but the arbitrary interventions being suggested are the proverbial hammer to crack a nut. Continuing to be creative and innovative with our finances is going to be vital – let's not make it any harder than it is already going to be.

Simone Hines is president of the Society of District Council Treasurers and executive director of resources at Nuneaton & Bedworth BC

NATIONAL AUDIT OFFICE

Devolution must be felt tangibly by communities

By Zoe Billingham | 05 March 2026

Government and local authorities should use the ongoing process of reorganisation to revive democracy in local communities and shift power downwards by defau...

NATIONAL AUDIT OFFICE

Reset or risk for SEND?

By William Burns | 05 March 2026

The Government’s long-awaited White Paper on major reforms to England’s SEND system is committed to significant intervention, pledging not only to fix this i...

NATIONAL AUDIT OFFICE

Three wishes to transform children's care needs

By John Pearce | 05 March 2026

There are challenges endemic across children’s care nearly four years on from the MacAlister review, says John Pearce. Here, he focuses on three component pa...

NATIONAL AUDIT OFFICE

The overlooked NEETs: the policy gap we can no longer ignore

By Julie Leonard | 04 March 2026

Shaw Trust is set to launch an innovation trial in partnership with the West London Alliance targeting 18-24s whose health challenges have kept them from see...

Popular articles by Simone Hines