Why council-owned Bournemouth retail park could be sold

Councillor Drew Mellor said details on how BCP Council will deliver a balanced budget for 2023/24 will be unveiled in a report due to be released on Monday.

He said the paper would also explain that “non-strategic” “purely investment” assets, such as Mallard Road Retail Park, could be sold.

Bournemouth Borough Council bought the retail park in September 2017 for £49million using money borrowed from other local authorities.

Conservative member Cllr Mellor provided the update on the financial position when fielding questions from residents on a live BCP Council Facebook broadcast.

The local authority asked government to borrow £76million over the next few years to fund transformation following the collapse of the plan to finance this work through the sale of the beach hut stock.

Cllr Mellor said the money could now be financed through capital receipts gained from selling assets.

A resident asked him why the council could not sell Mallard Road Retail Park to claw back a “serious amount of money”.

• Read more: How BCP Council is planning to balance the budget

Cllr Mellor said: “In the report we are bringing out on Monday we will be looking at rather than borrow from government, how we can sell some assets. Mallard Road is an interesting one.

Cllr Drew Mellor (Image: BCP Council)

“I have said we shouldn’t sell our assets where we can because effectively key assets we want to use to regenerate our communities and make sure we pass on more assets to future generations.

“So we are working very, very hard to negotiate with government where we don’t have to sell many of those assets. We can use them through Future Places to regenerate our communities.

“Non-strategic assets, purely investment assets like Mallard Road, will be under consideration to see whether we sell or not."

• Read more: Why key BCP Council budget scrutiny meetings have been cancelled and rearranged

In council meetings, Cllr Mellor has repeatedly criticised the previous Unity Alliance administration for their handling of finances, accusing them of wanting to carry out a “fire sale of assets”.

During the Facebook Live broadcast he said: “We are looking to a balanced budget position, detailing that next Monday and we are looking at some asset sales as well - not strategic, non-regeneration assets there.”

When the Daily Echo revealed Bournemouth Borough Council had borrowed from other authorities to fund the acquisition of the retail park, Cllr Philip Broadhead, who is now BCP Council’s deputy leader, said rental income provided an “extra £600,000 a year”, net of borrowing and other costs, towards safeguarding services.

• Read more: Mallard Road Retail Park was 'good investment' says council

The council’s investment portfolio, as of April this year, included eight assets: Mallard Road Retail Park, Madeira Road Student Accommodation, Citrus Building (ground floor Turtle Bay), Wessex Trade Centre, Dolphin Shopping Centre, Saxon Square, Airfield Industrial Park and Parkway House Avenue Road.

Some of the assets in the council's investment portfolio

• Read more: The 8 assets that made BCP Council £2.7million last year

The draft statement of BCP Council’s accounts for 2021/22 showed a rental income from investment property of £6.091million. This was up from £4.932million the previous year.

The fair value of the investment property overall for 2021/22 is listed as £92.687million, up from £90.225million.

The report Cllr Mellor referenced is due to go before scrutiny committee members on October 25 - the day before it goes to cabinet.