THE Isle of Wight Council has borrowed more than £19 million from the government to invest in industrial units in Manchester and Kent. 

The figures have been revealed by the Bureau of Investigative Journalism as part of an investigation into council finances, which revealed some of the smallest councils in England have tied the future of their public services to the uncertainty of the property market.

Experts warn commercial property investments are volatile and if councils are financing them through borrowing, this could be even riskier.

However, Cllr Stuart Hutchinson, the council’s cabinet member for finance, said he tried to minimise all risks when deciding which properties to invest in.

The council contracts with Portsmouth City Council for fund management and acquisition services.

Cllr Hutchinson: “There is a risk in everything but we look for high value property, occupants with strong financial standing, and in strong growth areas with good transport networks.”

The Isle of Wight Council purchased two properties — both industrial units — one in Manchester for just over £10 million, and the other in Kent for £8.6 million.

For the Manchester property, the council paid 24 per cent above the asking price.

Out of the fifteen units, one does not have a tenant.

Sitting tenants include We Buy Any Car, budget fashion brand In the Style and a vending machine company.

Other tenants include NRS Healthcare, which supply mobility equipment and disability aids, and Mettler Toledo which make metal detectors.

Since 2017, the amount borrowed by the council has increased by £20 million.

The council has also increased its reserves by 8.59 per cent.

Cllr Hutchinson oversaw all the decisions and said he did so ‘cautiously’.

He said: “The government has given us the ability to borrow up to £100 million and use it to purchase key investments that fit our detailed parameters.”

The investments give a return of £700,000 after borrowing costs are taken out — money the council says is used for services, such as adult social care.

The council declined the chance to invest in a property on the Isle of Wight, saying it did not match its criteria.

Cllr Hutchinson added: “These are commercial investments. If a particular investment matches our criteria, we will buy on Island.

"Every pound we make is a pound we don't have to cut."

Although the data surrounding the investments is within publicly available audit reports, Cllr Hutchinson said they should not necessarily be more visible on the council’s website.

He said: “We do not keep it a secret but we do not go out of our way to publicise it.”

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Green Party parliamentary candidate Vix Lowthion said: "Plenty of investment is needed by the Council in areas on our Island and they actively choose to borrow money to put elsewhere.

"£19million could have gone far here in terms of a community energy company, efficiency savings, land for development and even a new floating bridge (that works)! Bringing jobs and income. But instead they borrow, speculate and invest elsewhere.

"Dreadful decision."