CIVIC chiefs in Southampton could invest tens of millions of pounds in properties across the country to bring in much-needed income.

Labour council bosses want to set up a property investment fund that would be used to buy sites around the country and bring in rental income.

But they are being warned about the risks of borrowing £60m to invest in developments, while opposition councillors say decisions on investments should “not be done behind the scenes”.

Council leader Simon Letts said: “The basis of this is to make a return on the money spend, it’s to get the best return and it may be in the city or it may be elsewhere.”

It is hoped the plan could generate at least £1m a year, after interest, with the council taking advantage of low-interest loans available to local authorities.

If plans for the new fund are approved at a meeting of the cabinet today, it could see £60m borrowed to invest in sites.

Civic chiefs hope the money generated would provide vital income to the council’s coffers.

The authority recently approved £21m of cuts, with 270 jobs being lost, while a final decision on a further £8m of savings is due in the summer.

“The target for year one is to make £1m, it doesn’t mean that we will be investing £60m in one thing”, Cllr Letts said.

“There are a number of ways of investing the money, it could be by buying property or in trusts. That would split the risk.”

He said there were currently no “active” plans to buy any properties, which could include shopping centres or other developments generating significant income, and that Tuesday’s decision is just to “agree the principle” at this stage.

If the plans are approved council officers would have the power to make decisions without it coming to full council.

Cllr Letts said deals will be made public only after they are agreed, due to the “commercial sensitivity” of bidding for sites and the risk of being outdone by rival bids.

Southampton would not be the first council in Hampshire to adopt the strategy.

Portsmouth City Council recently bought a Waitrose supermarket in Somerset, while Fareham Borough Council has spent more than £8m on a number of properties.

Eastleigh Borough Council also invested in the construction of the new Hilton hotel at the Ageas Bowl cricket ground.

Conservative opposition leader Jeremy Moulton said: “A lot of councils are doing this, but a lot of councils put money into Icelandic banks.

“I think we need to have a good look at the risk of borrowing lots of money. It could work.

“Any large purchases should go back to the cabinet or council, so there is proper democratic oversight and no deals are being done behind the scenes.

“I’m uncomfortable with it being delegated to officers, when you talk about £60m being borrowed you need total transparency.”

He also said the council needed to ensure it was not caught up in a “bubble” with other councils also investing in property, which could burst and “cause problems further down the line”.

Independent anti-cuts councillor Keith Morrell said that while the goal of raising more income was “laudable”, that “there is a shortage of housing in the city and my opinion is that the administration should be focusing its efforts on meeting the needs of its citizens and investing in the city.”