Reading Borough Council (RBC) has put its commercial property spending on hold and is now set to scrap £180 million of planned further expenditure.

The council spent approximately £74.9 million on four commercial properties from April 2016 to March 2019, with the aim of creating extra revenue which would help to prevent cuts to public services.

It had planned to spend an additional £180 million from April 2020 to March 2023 .

 A RBC spokesman said: "In light of the current economic and financial uncertainty arising from the Covid-19 pandemic, no commercial investment opportunities are currently being pursued.

The council’s Medium Term Financial Plan is currently under review, including its commercial investment strategy.

It had planned to spend an additional £180 million from April 2020 to March 2023.

Although no decision has been made on whether to remove the proposals, Policy papers from this summer indiciate the authority 'anticipates' the commercial property spending will be removed from the council's financial plan.

The investment was described by Green councillors last year as “gambling taxpayers’ money”.

READ MORE: ‘Gambling taxpayers money’: Greens attack council £70m commercial investment

And the Office for Budget Responsibility (OBR) has now predicted the value of offices and commercial buildings will drop by almost 14 per cent this year.

The boom in online shopping coupled with a shift toward remote working during the pandemic has created lower demand for retail and office spaces.

The OBR has forecast prices falling by 13.8 per cent in the 2020-21 financial year before slowly recovering, rising by 0.9 per cent in 2021-22 and by two per cent by 2024-25.

RBC has estimated it will lose around £530,000 this year from reduced commercial property income due to the pandemic.

The council had hoped to raise around £1.5 million in total from the four properties each year prior to the Covid-19 pandemic.

While RBC is set to receive 75 per cent of its lost income during this year (2020/21) from the government due to the pandemic, investment in commercial properties is excluded from this.

A spokesman for the council added: “Like many local authorities, Reading has made use of the low cost of PWLB borrowing to invest both improved facilities for local residents, as part of our capital programme, or to generate new revenue streams by investing in commercial property for rental income.

“The council’s investments are diverse and, it should be noted, are significantly smaller than those in some other local authority areas.

“It is normal practise to carry out risk profiling in advance of any significant investment, and while nobody could have predicted Covid and its knock-on impact, it is important to say these are investments made for the long term.

“Any fall in investment value is only generated if and when the property is sold.

“The impact of the pandemic on the council’s finances is being closely monitored, which includes not just the impact on commercial investments but all council income, including fees and charges from council services.

“Options to mitigate all associated pressures are currently being developed as part of the council’s annual Medium Term Financial Plan refresh process.

“No further investment purchases have been made since Four 10 Thames Valley last year and there are no plans to make further investments at this time.”

What properties has the council bought?

RBC spent around £11 million each on Adelphi House, which is a Job Centre, and 160-163 Friar Street in 2016/17, also known as Reading County Court.

The council spent further £20.1 million on Kennet Wharf on Queen’s Road, which is Visa’s European home, in 2017/18.

Its final big purchase was a £32.9 million outlay on Four 10 Thames Valley Park in April 2019, home to pharmaceutical company Sanofi.

READ MORE: Council invests in £32.9m Thames Valley Park offices

All four purchases were funded through a loan from the Treasury-backed Public Works Loan Board (PWLB).

The treasury says it will look into changing the terms of the PWLB to ensure local authorities continue to invest in housing, infrastructure, and public services rather than buy “very significant amounts” of commercial property for rental income.