BOURNEMOUTH council has nothing to fear from new Government proposals on investments, the borough says.

The Department for Communities and Local Government (DCLG) is currently consulting on plans to ban councils from borrowing money "solely to invest in a yield-bearing opportunity" or investing in properties outside their area.

It follows reports that some councils are buying "risky" portfolios, including shopping centres and supermarkets, to make up the cash lost through Government funding cuts.

Bournemouth council last year announced a new Asset Investment Strategy, which involves investing £125 million in both residential and commercial properties across the conurbation, backed with cash borrowed at low rates from the Public Works Loan Board.

Councillor Philip Broadhead, cabinet member for economic growth, said: "We have a well-defined Asset Investment Strategy, which was approved by cabinet last year.

"In the strategy, it is clear that we are acquiring investments only within our area to fit the dual approach of generating an income to protect frontline services whilst also benefitting our local economy.

"Therefore, it is my understanding that the changes which the Government is consulting on would have little to no impact on our approach, and indeed if anything is an endorsement of the strategy which we have adopted."

And Shaun Darcy, the borough's assistant chief financial officer, said: "The council’s Asset Investment Strategy is in line with DCLG’s direction of travel in respect of investments and borrowing and the criteria these should meet to be deemed appropriate to be delivered by the local authority."

Commercial investors have been highly critical of councils buying up properties, claiming it is driving up prices and distorting the market.

And the Government has expressed concern that councils may make unwise investments and become dependent on risky commercial income for service delivery.

The consultation states: "For this reason the Government proposes requiring local authorities to disclose their dependence on commercial income to deliver statutory services and the amount of borrowing that has been committed to generate that income."

In Bournemouth last year an 'investment panel' was set up comprising council leader John Beesley, deputy leader Nicola Greene and Cllr Broadhead, as well as officers, to oversee the implementation of the strategy.

Its objective is listed as "to take advantage of favourable interest rates available through the Public Works Loan Board to assemble a portfolio of commercial property investment assets", in order to deliver a "socio-economic benefit to the town" and boost the council's finances.

Offices, industrial buildings, shops, hotels, care homes and car parks are all under consideration for purchase, in the conurbation including Christchurch.

The council says it is spreading its investments to avoid overexposure, and will not look "outside the local economy" without "exceptional circumstances".