Council plans to sell golf club at multi-million pound loss

A council in Norfolk is reportedly planning to sell a golf club it bought for more than £7 million for less than £2 million.

According to reports, Breckland Council bought Barnham Broom Golf Club in 2006 for £7 million, plus more than a million pounds in taxes. To make matters worse, it then spent £2 million on improvements.

The council tried to sell the venue in 2018 to the current tenant for just £6.5 million, but since then its value has collapsed further and according to council papers, it is planning to sell the asset in the next financial year for just under £2 million.

It is understood that the current tenant is the only business in the running to buy it.

The papers do not name the asset as Barnham Broom and the council has kept all its dealings about the club private, citing “commercial confidentiality”.

Barnham Broom Golf Club. Image from Facebook

One source said: “They could have stuck that money under a mattress and got a much better return.”

“As council funding has been cut, many have looked at alternative ways to generate revenue. With interest rates so low for the last decade, one popular strategy has been to borrow millions of pounds from the Public Works Loan Board,” reports the Eastern Daily Press.

“Councils usually borrow from that board when they need to fund a big project like a new road. But many have instead borrowed to buy commercial property and rent it out. They justify it by saying they get a better return than leaving the cash in a bank.

“The Treasury has now stopped councils doing this, but it comes too late for the billions of pounds already invested by councils across the country in property from gyms, to office blocks. Critics point out that councils have no experience or expertise in commercial property investment and can be taken for a ride.

“More worrying is what happens to council budgets when a tenant defaults on their rent or a building remains empty, when that rent money has been earmarked for public services.”