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

Is democracy in danger from election delays?

By Jonathan Carr-West | 27 January 2026

Repeated election postponements place councils in an invidious position and risk undermining democratic accountability and trust in local governance, says Jo...

NATIONAL AUDIT OFFICE

Strap in now for a bumpy London elections ride

By Nick Bowes | 27 January 2026

London’s traditional town hall politics is set for a shake-up in May. As it braces for its most consequential local elections jolt in a generation, Nick Bowe...

NATIONAL AUDIT OFFICE

Calling for capital investment in London

By Sir Bob Neill | 27 January 2026

Sir Bob Neill warns against talking down our capital city and makes the case for supporting London’s boroughs.

NATIONAL AUDIT OFFICE

What LGR means for the workers

By Heather Jameson | 26 January 2026

Local government reorganisation (LGR) is not all about the structures and politics – what about the staff? Heather Jameson spoke to Mark Greenburgh and Toni ...

Popular articles by Simone Hines