Increase in out-of-area property acquisition by local authorities leads to inquiry

Article summary

The Public Accounts Committee has launched an inquiry into local government commercial investment due to a substantial increase in out-of-area commercial property acquisition. The National Audit Office (NAO) published a February report on local authority commercial investment which assessed ‘whether the Ministry of Housing, Communities & Local Government (MHCLG) has effective oversight of the risks to the financial sustainability of local authorities due to their investments in commercial property’. The report found that the estimated commercial property purchases for 2013-2014 to 2015-2016 were £460m, compared to £6.6bn for 2016-2017 to 2018-2019. The NAO also revealed that local auditors have concerns about the governance and risk management arrangements for investment activity in some authorities. On 11 May 2020 at 2:30pm, the Committee will question officials from the MHCLG on ‘gaps in commercial skills in local government, and the extent to which the MHCLG formally monitors commercial activity and long-term exposure to risk’.