The accountancy giant KPMG has raised the alarm over the way a council is buying commercial property — part of a £5.7bn spree by local authorities across Britain over the past decade.
KPMG said Spelthorne council in Surrey, which has borrowed £1bn from the Treasury to build a property portfolio, may have “overvalued” its investments.
The alert is significant because Spelthorne became the poster boy for councils taking risky bets on commercial property, borrowing at a low rate of interest from the government’s Public Works Loan Board (PWLB) and using rental income from the sites to shore up their finances.
