COUNCIL bosses in Wyre Forest have splashed out £1.6million to buy another out-of-district office block.

The purchase of Number 1 The Courtyard, Buntsford Gate in Bromsgrove comes just days after Wyre Forest District Council announced the £6.1million deal for Stratford House in Solihull.

The authority said the commercial investment, made by using capital resources funded through borrowing, will generate an estimated £28,000 income per year as they look to plug a £1.6million funding gap over the coming years.

Finance chief Councillor Nathan Desmond warned investments such as this were vital to avoid deeper cuts to services in future.

Following the Solihull announcement, Wyre Forest Labour slammed the Tory-administration arguing the money should have been invested within the district to boost the local economy.

In June, the council did buy retail units in Kidderminster town centre for £1million and authority leader Marcus Hart said more district investments were being made and would be announced shortly.

The Bromsgrove office development is an 8,515sq ft building, fronting the A38 immediately adjacent to Morrison’s supermarket. The deal was completed on Monday (October 1).

Councillor Desmond said: “The council has to close a £1.6m funding gap over the next few years. If we don’t do what many any other councils are doing and invest in property to produce a return, councillors will have to take difficult decisions such as making even deeper cuts in services that local people value.

“This acquisition in Bromsgrove will generate an estimated net income of more than £28,000 per year over a four year average, which will be used to support council services in Wyre Forest.

“The returns we will achieve are modest but that is because we have to borrow the money to buy the properties and meet the costs of repaying the borrowing from the rental income.

“Under the legal rules on council expenditure, we can borrow only for capital expenditure such as purchasing properties and land.

“I am sure that residents would rather see the council generate income from property than have to cut services or increase fees and charges including council tax.”

Councillor Hart added: “This latest acquisition reaffirms the council’s commitment to North Worcestershire which is reflected in the North Worcestershire Economic Development and Regeneration shared service which we host and as a partner with Bromsgrove and Redditch councils in the Greater Birmingham and Solihull Local Enterprise Partnership.

“We are deliberately building a portfolio that is mixed both by property type and by geography, in order to build the best balance of risk. There are several further investments in Wyre Forest that have been approved and we will announce them when purchases have been completed or contracts signed.”