PLANS to gamble £20million on the property market have been put forward in a Tory budget as a way to make up for Government funding cuts.

Southend Council claims central funding will be slashed by 42 per cent from April meaning the council has to find £4m in savings.

Some of this will be funded through an increase in council tax.

The council, subject to approval, has outlined plans to continue building a property portfolio and has set aside up to £20million for commercial property purchases over the next three years.

The returns from these purchases are expected to prevent cuts to services or larger rises in council tax when the Government grant is cut completely, which could happen next year.

However, there have been concerns that such investments put public money at risk. In December, the Government’s housing minister warned he may consider “interventions” to stop councils doing this.

Council leader John Lamb said: “We are not going to make a fly-by-night decision on the investments.

“This is done carefully to see if it worth investing and whether we will get a return, whether it makes sense and how the market is.

“If the government doesn’t want us to make these investments so we can secure our services then they must stump up the money to make sure we can do it through them.

“Many councils have made these investments over many years, we are doing it and we’ve got some very good investments.

“I think the actual investments we’ve made so far are showing us a good return.”

Council leaders said they could not say whether these property purchases would be within Southend or whether they would be outside of the borough.

Deputy leader James Courtenay added: “One of the other things we look at is where it is a useful thing to do for the town.

“We must be careful not to conflate the two because we should be making good business decisions from an income point of view but obviously the council’s job is helping and supporting the town.

“An example is the Gasworks site which is probably not generating the maximum level of income at the moment, but the pay off is we’ve been able to get a load of car parking spaces for the summer period, which supports the seafront and the town.”

Labour Councillor Ian Gilbert questioned why the budget had not considered social housing.

He said: “There is widespread agreement that the council should be involved in social housing but there seems to be considerable amount of foot dragging on it. In the long run people don’t lose money by building housing, it is a long-term investment that will help balance the council financially.

“I think the council tax rise is inevitable given Government policy, I think many councils will propose similar rises. There has been a deliberate decision of government to cut support for councils.”