AT a time when West Devon Borough Council is looking to reduce costs, borough councillors have approved a strategy to borrow money so they can purchase commercial properties to create new revenue streams.

The idea behind the scheme is that following the purchase of such properties and after all costs are deducted, the surplus generated would be used to help fund services within the borough.

The strategy is part of efforts by West Devon Borough Council to balance the books — the council is facing a budget gap of £1.1-million by 2021.

Leader of the council Cllr Philip Sanders said: ‘We know the Government’s revenue support grant is disappearing, therefore we must make sure we are a forward-thinking council with a proactive and ambitious appetite for income generation and reducing inefficiency.

‘We have a moral obligation to the people of West Devon to not just sit back and take the cuts without doing everything we can to bring in extra money to help maintain and improve the services that matter most to local people — and that is the basis for this property acquisition strategy.’

The proposals state that the council would borrow money at historically low interest rates. Borrowing of this sort can only be obtained to acquire assets and the money cannot be used to cover the council’s budget shortfall directly.

The borrowed money would be used to buy commercial properties with established tenants in place, with the intention of immediately generating a revenue stream for the council through the surplus following borrowing, administration and maintenance costs.

Cllr Sanders said: ‘This commercial approach to managing the council’s finances has never been taken before in West Devon and I’m proud that we are taking the initiative to protect frontline services.

‘We have taken this commercial approach after we talked to a focus group of local people on budget options. Those canvased gave views and suggestions that have helped to shape our strategy. As a result, this has been our focus and we have made income generation a top priority.’

The initiative is part of the council’s wider efforts to reduce costs. Proposals for West Devon Borough Council to merge with South Hams District Council will go out for public consultation this month — see this week’s edition of the Times for the full story.

Do you think a cash-strapped council borrowing millions to buy commercial property is a wise investment or a risk not worth taking? Share your thoughts with us at [email protected] or [email protected]