Questions over purchase of centres
Toby Neal’s recent article on Shropshire Council’s £51,000,000 foray into the commercial property market cast little light on the either the manner of the purchase or the future management of the Shrewsbury shopping centres.
A Freedom of Information Act request resulted in an answer that was less than comprehensive but revealed the extent of the secrecy in which the purchase was conducted and how the properties will be managed.
The council’s approach to the democratic process means that Shropshire residents may not be told which, or even how many, councillors voted for or against this purchase. The council claims that telling voters how councillors voted would be prejudicial to effective conduct of public affairs.
One must ask why locally elected representatives demand anonymity when they are spending £51,000,000 of public money on a venture into the retail property market.
Effective conduct of public affairs entails accountability so why are Shropshire councillors hiding behind the cloak of anonymity?
Council Tax payers might not be aware that ownership of the shopping centres is vested in a Jersey Property Unit Trust (JPUT), an arms-length offshore financial and ownership arrangement. A trustee is the legal owner of the shopping centres.
JPUTs are not legal entities, there is no public register of JPUTs in Jersey, and there is no legal requirement for either an auditor or audited accounts. Trust instruments, registers of unit holders, and consents issued by the Jersey authorities, are not publicly available documents.
JPUTs confer tax benefits and scope for avoiding Capital Gains Tax and stamp duty when an asset is sold. It is somewhat questionable for a public body to enter into an arrangement that gives opportunities to avoid UK tax.
The council has confirmed that property management decisions will be made offshore, in Jersey, by the JPUT, and that it cannot even disclose the cost to Council Tax payers of the company appointed to manage the shopping centres without the consent of the JPUT.
If the shopping centres were in the hands of a private company there would be some measure of public accountability and financial disclosure and board members and executives would be identifiable. It appears from the response to my FOI request, and the use of a secretive entity in an offshore tax haven, that Shropshire Council has decided to disclose as little as possible about its use of public funds in this matter.
B Payling, Shrewsbury
A spokesperson from Shropshire Council said: “The purchase of Shrewsbury’s main shopping centres will support the economic growth and regeneration of Shrewsbury town centre. It will support the development of Shrewsbury as a ‘destination’, help provide an improved and attractive retail and leisure offer, and secure employment for Shropshire residents both directly and indirectly.
“It will also generate a sustainable year-on-year income stream which the council will invest in vital social care services – something that almost everyone will be involved in, or need, at some point in their lives. The purchase will generate an additional £2.7 million in the first year, and we expect this return to increase year-on-year.
"The purchase has been received very positively by the local business community, and is an important part of wider plans to make Shropshire a great place to live, learn, work, invest and visit. Through the Shrewsbury Big Town Plan, Shropshire Council is working positively with our partners and communities to deliver an exciting vision for the shopping centres and the town centre as a whole.
"Detailed information relating to the purchase of the shopping centres is readily and openly available on the Shropshire Council website.”