Council decision making questioned after value of Shrewsbury shopping centres falls by £11 million

Councillor Alan Mosley, leader of Shropshire Council's Labour group, said yesterday's announcement that the Shrewsbury shopping centres purchased by the authority had dropped in value by a fifth, leaves "massive questions" over judgement.

But the council has said it is comfortable with the valuation, and has continually argued that the purchase of the centres is a long-term project that also allows it vital control over the future development of the county town.

The council purchased the Shrewsbury's Darwin Shopping Centre, the Pride Hill Shopping Centre and the lease on the Riverside Shopping Centre along with the Riverside Medical Practice last year.

The deal was worth £51m but now the council has confirmed their value has dropped by around a fifth.

Councillor Mosley said: "We warned of the massive risks in buying these shopping centres when leading investors were pulling out and returns were declining rapidly.

Question

"After spending many hundreds of thousands of pounds on consultants there are massive questions about the quality of that advice and on administration’s judgement and decision making competence. Many will ask whether due diligence principles were applied and whether this whole escapade is an ill-informed ego trip.

"Certainly it is a disaster for all Shropshire Council taxpayers as £11m is written off overnight and returns plummet. I question the competence of the administration as the Tory chaos in Westminster is reflected in such huge problems in Shropshire."

When revealing the drop, council leader, Peter Nutting, said they had expected changes in the value and revenue generated by the centres, but that they are designed to provide a long-term continual income for the authority.

He said: "We knew that the tenancies, income and value would change, but we bought them as an investment to support the economic growth and future vitality of the town centre, as well as provide us with a sustainable year-on-year income stream. This hasn’t changed.

“The outlook in the short-term suggests that income will fall before it rises, but we were prepared for that and we knew it would still be making us money and helping to pay for essential public services across the county.

“Footfall is good and the town centre continues to buck the national trend. This is not only great for Shrewsbury, but also for the rest of the county as it encourages tourism and provides jobs.”