Newport council eye up £50m investment fund to become more commercially minded

Finding new ways of making money is a priority for the council having overseen budget cuts of £45 million in the last five years amid growing demand for social care.

Investing in property both inside and outside Newport is one “immediate opportunity” that could be explored as part of a commercialisation strategy.

Similar moves have been made by local authorities like Monmouthshire County Council, which bought Newport Leisure Park for £21 million.

Newport Leisure Park, with brands such as Cineworld, Pizza Hut and McDonald's, sold to Monmouthshire council for £21m

Writing in a report, chief executive Will Godfrey said: “Generating additional and sustainable sources of income is very challenging.

“Adopting this approach requires careful thought as it introduces new activities and different types and levels of risk.

“There will need to be an acceptance that as we are exploring new activities, we may not succeed in everything we try.

“Nevertheless, developing a more commercial approach is an important element of our ongoing financial sustainability.”

If cabinet members back plans to develop a commercialisation strategy, an investment board made up of senior councillors and officers would oversee any commercial activity.

The report does not include any opposition councillors on the board’s membership, something Conservative group leader Councillor Matthew Evans hopes will change in the future.

Councillor Matthew Evans

But the former council leader welcomed plans to diversify, saying: “It’s long overdue, and I’ve been saying for a long time that rather than putting council tax up they should be generating income.

“If they establish a board, I expect the leader of the opposition to be involved as well as people from the private sector and businesspeople who have a proven track record.”

Aside from property, the council will consider providing other services, such as energy and trade waste, on a more commercial basis.

A trading company through which commercial activities are managed could also be set up, subject to a £100,000 feasibility study.

But the report says creating an investment fund as a way of generating income carries inherent risks, including significantly increasing the council’s long-term debt.

There is also uncertainty around how much money the council would make, with fluctuations in the property market affecting potential rental income and the value of assets.

Cabinet members will discuss the report on April 17.