The NAO report is a helpful contribution to the ongoing debate around commercial investment in the local government sector. We know that funding for local government over the past few years has not been enough to balance the books, meaning councils have been faced with choices.
Given the ongoing funding pressures it is not surprising that new avenues for income generation have been explored by councils to try and ensure ongoing service provision. While there is always risk associated with property investment, there can also be rewards if managed properly, with a return on investment that can be put back into supporting the local community. But it is vitally important to ensure that proper governance processes are followed and that financial risk assessments are thorough and supported by expert professional advice.
Buying commercial property can deliver benefits for local authorities including both the generation of income and local regeneration. However, as with all investments, there are risks.