LIB Dem county councillors have expressed concern after it was revealed that Surrey County Council has not spent any of the income derived from its £298 million commercial property portfolio on council services.

Surrey, either directly or through its wholly owned subsidiary company Halsey Garton, has purchased 23 properties, 65 per cent of which are situated outside of the county across England. The total amount invested, as of March 2018, is £298,073,000.

In November 2017, the county council transferred rental income from commercial properties of £3.8m into its ‘revolving infrastructure and investment fund’, which is used to support the purchasing of commercial property.

However, one of the central tenets of the council’s original investment strategy, agreed in July 2013, was to “generate additional income for the council that can be used to provide additional financial support for the delivery of functions and services”.

Following her question to Surrey’s cabinet and response on this matter on March 27, councillor Hazel Watson, leader of the Liberal Democrats on Surrey County Council, said: "I am deeply concerned that none of the income derived from the county council’s extensive property investment portfolio so far has been used to support council services. This contradicts previous assurances from the Conservative-administration that the purpose of their investment strategy was to support the county council’s budget.

“The county council is proposing millions of cuts to services this financial year and it is simply unacceptable for them to use precious resources to purchase more property, when that resource should be used instead to protect services for Surrey residents.

“I am calling on the Conservative administration at County Hall to explain why this income has not been used for its original purpose, for the income now to be used for that purpose and for the county council to cease acting as if it were a private sector property investment company, when it is a local authority providing public services to local people.”

Responding, Surrey’s Tory cabinet member for property and business services, Tim Oliver said: “The investment portfolio created under the [council’s] investment strategy consists of property investments which have been made by the council in order to deliver economic regeneration or to provide for long-term future service use, whilst delivering an investment return. These assets provide flexibility in the estate whilst producing a net revenue.

“The council has also provided its subsidiary company, Halsey Garton Property Ltd, with equity and debt financing to facilitate the purchase of assets for their investment return. The portfolio of property investments therefore consists of assets held by the council together with those owned by the property company. The council is developing a mixed and diversified portfolio in order to manage the inherent economic and market risks.

“The net income delivered by the strategy is reported in the annual report provided by the investment board to cabinet and to scrutiny committee. That report is available on the council’s website.

“A forecast for the current year is reported in the monthly monitoring report provided to cabinet. The total net income delivered to date by the strategy will be used to support spending on council services in the future and is expected to be £5.3m by March 2018.”