A LOST £7 million by Somerset Council on the sale of a property in Stoke-on-Trent originally bought as an ‘investment’ could have covered the cost of repairing 65,000 potholes across the county, it was claimed this week.
Conservative opposition group leader Cllr Diogo Rodrigues criticised the council’s record on asset sales which has so far seen it lose more than £90 million.
The sale involves properties bought by former district councils which borrowed hundreds of millions of pounds to do so, and now being sold by the unitary authority as it tries to avoid going bankrupt.
Cllr Rodrigues said: “Somerset Council is projected to lose around £90 million on its commercial property investments.
“One example is the Steelite site, in Stoke-on-Trent, purchased by the former Liberal Democrat-run Somerset West and Taunton Council for around £21 million and recently sold by this council for around £14.4 million, a loss of almost £7 million.
“Based on the council’s own figures, that would have been enough to repair around 65,000 more potholes across Somerset.
“Selling assets at a loss while keeping much of the debt attached to them is the equivalent of selling a house for less than you paid for it, not paying off the mortgage, and being saddled with the debt.”
Cllr Rodrigues questioned how much borrowing remained outstanding on the commercial properties which had been sold, leaving Somerset council taxpayers to continue repaying debt on assets the council no longer owned.
Deputy Lib Dem council leader Cllr Liz Leyshon said the assets had generated a ‘very considerable income’ before they were sold.
Cllr Leyshon said without the sell-off the authority would have had to issue a ‘Section 114’ notice, effectively a declaration of bankruptcy.
She said such a move would have led to Government commissioners taking over the council.
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