A LEADING councillor says his authority is “reaping the rewards” of an innovative investment scheme, from which the council is set to pocket a £1m windfall.

Test Valley Borough Council’s finance portfolio holder, Peter Giddings, says the authority is set to make an additional £1.3m this financial year, from investments made under the Project Enterprise scheme.

According to Councillor Giddings, the extra money is being made from the authority “shrewdly” investing nearly £20m of its reserves as part of the project.

He said: “Last year, Project Enterprise investments earned the council some £843,000 more than would have been achieved if our balances had remained in the cash investment portfolio.

“We are now reaping the rewards of these well-managed, shrewd investments by the council which can be reinvested for the benefit of our communities.

“After taking into account the properties purchased in the last financial year, it is expected that the additional income earned by Project Enterprise investments in 2017/18 will be some £1.3m more than could be generated from cash balances.”

The Project Enterprise scheme was initially set up by the council in 2014 in response to government cuts to local authority funding.

Under the project, the council has invested in a number of properties, including commercial, retail and housing.

Investments within the borough include properties on the council’s business parks at Portway and Walworth, while investments have also been made in Southampton and Newbury.

As of March 2017, the amount of investment in completed projects was £18.74m.

The council has also approved a further £16.723m for future investments that would see total expenditure reach £35m by the end of 2018/19.

TVBC says this will allow them to be free of dependence on government external funding, two years earlier than planned.

However the move has been criticised by pressure group, the Taxpayer’s Alliance, which has accused the council of going “far beyond its brief ”.

The group’s chief executive, John O’Connell, said: “Councils shouldn’t be playing the property market and need to think again before committing taxpayers’ money to this project.

“You cannot on the one hand argue that budget reductions mean you need to raise council tax and then find £30million to play the property speculator.

“Too often we see councils going far beyond their briefs and taking away business that can adequately be done by the private sector.”