They have recently acquired two new properties, one at 84 Sidney Street Folkestone (below left), two doors up from the notorious 80 Sidney Street, and No 1 Claremont Rd Folkestone (below right). These like the rest of the properties will be rented out at market price to earn an income for the council.
All the properties in our district are based in Folkestone and Oportunitas has not looked to acquire properties in Hythe or New Romney. Such a Folkestone centric viewpoint by the company is naive, short sighted and discriminatory we believe.
Only last week the Chartered Institute of Public Finance Accountants (CIPFA) suggested local authorities were investing in commercial properties disproportionately to their resources. They raise further concerns that councils in England are putting public funds at “unnecessary or unquantified risk” when borrowing to invest in commercial property.
CIPFA will “issue more guidance and will make it clear that these investment approaches are not consistent with the requirements of fiscal sustainability, prudence and affordability,”
The future of Oportunitas Ltd came before the Cabinet on the 28th Feb 2018. The approved investment in the company for property acquisitions was £4,787,500. At that time Oportunitas owned the following:
On the 12th June 2018 Oportunitas added 84 Sidney Street – Folkestone which has four flats at a cost of £385,000. Then on the 10th Oct 2018 it purchased No 1 Claremont Rd Folkestone for £350,000 according to the land registry. (There would of course be fees to pays as well. How much these were precisely is currently unknown)
From the profit and loss account we can determine that presently Oportunitas Ltd cover their direct costs but do not generate sufficient surpluses to meet its overheads, according to Appendix 1 of report C-17-83. The report was about the future of Oportunitas Ltd which set out three options, they being:
Do nothing – not recommended in report
Close Oportunitas Ltd – not recommended in the report
Refinancing & Scaling Up – recommended in the report.
The Cabinet followed the recommendation in the report and voted accordingly, avoiding any irrational behaviour. A cash injection by F&HDC of £6.9m was agreed to assist Oportunitas Ltd becoming sustainable. F&HDC said this would provide:
“a modest but useful return to the General Fund of around £300k per year, or 2.6% on the capital employed.”
The cash injection of £6.9m by the council into Oportunitas came from the Public Works Loan Board. The 5 year loan was at 1.5% pa.
By F&HDC’s own calculations/guesstimate, it would take six years before Oportunitas Ltd was trading profitably. And F&HDC does not rule out further cash injections into the company. So Oportunitas Ltd has borrowed in total, from its sole shareholder – F&HDC – almost £11.7 million.
Six years before Oportunitas Ltd sees a possible profit, meaning it may take to 2022/2023 or beyond for F&HDC to realise any possible profit. That means a possible nine years worth of trading with no guaranteed return for the taxpayer of the district. More cash injections are not ruled out and what we the taxpayer and Council might get in return is a modest £300,000 per annum. Is that prudent investment? Best Value for Money? And of course who in the “real world” could start a business and survive nine years without making any profit?
Also do you the remarkable residents of our fantastic district feel safe with Cllr Claire Jeffrey at the helm, especially as she had difficulty in paying her Council Tax?
Also we do question the competency of the people named above as their web page still states “Shepway District Council” when back on Wednesday the 17th January, at an Extraordinary meeting of the Council, 18 Cllrs voted to change the name to Folkestone & Hythe District Council, at a cost they allege of only £10,000. This became effective as of the 1st April 2018.
Moving on, we ask why after seven months nobody has sought to change the name on the Oportunitas website, from Shepway to Folkestone & Hythe DC, after all it’s not rocket science now is it.
If the devil is in the detail, the small detail of changing the name on the Oportunitas website would be a good place to start.
Finally, we ask Folkestone & Hythe District Council, the sole owner of all the shares, if the £4.2 million spent so far on acquisitions, and in part funded by loans from the PWLB, was prudent, or is the Council putting public money at unnecessary and unquantified risk? We’ll leave you to decide that.
