Eastleigh Borough Council borrowing £3.5m to build new Marks and Spencer food store

The council has revealed that it is is borrowing the money to build a Marks and Spencer store ready for the company to move in.

The details were revealed in answer to a request submitted by the Daily Echo under the Freedom of Information Act.

It comes after the Liberal Democrat run authority was slammed by business owners for not stating how much it was costing the taxpayer to bring the national multi-million pound brand to the borough.

Further criticism then came when rumours sparked suggesting the store had been given “preferential treatment” with a lower rent.

Now the Freedom of Information request has confirmed the council will be using the borrowed money to deliver the project for Marks and Spencer – but details of how much rent is being paid by the company has not been revealed.

The council has declined to say how much it is charging M&S to use the building because it is considered “commercially sensitive” but council chiefs say the investment will mean they can protect frontline services.

Business owners in the area have been outraged by the project and have now said it’s unfair to offer to build a store for such a big name.

They say the store is getting preferential treatment that they have not received.

Plans to bring Marks and Spencer to Eastleigh have been in motion for almost two years.

The Daily Echo has previously reported that the 16,000 foot food store is set to be built on land off the roundabout linking Southampton Road and Twyford Road and expected to open in October this year, creating 50 new jobs.

The store is being built on council-owned land and it has now been confirmed the council has borrowed £3.5million to complete the project for the store.

Planners at the council - which only has an overall budget of £9million - gave the scheme the go ahead in February last year and the council is now waiting for the green light from Marks and Spencer to start building.

In the FOI request we asked how much the council had borrowed to fund the Marks and Spencer store, the answer - £3.5million, which may be less if cash reserves are sufficient.

Next we asked if they could breakdown where this money was being used in relation to the store.

The council said this information is not available at present but the amount will be spent on the delivery of the project, including the build contract for the store.

The full breakdown in spending will not be known until after the building contract is complete.

When asked whether Marks and Spencer would be paying rent, when they would start paying and how much, the council said this was commercially sensitive.

But they did confirm that Marks and Spencer is paying a commercial rate to ensure a surplus is returned to the council.

Traders in Eastleigh have said it’s “outrageous” that such a big name is not paying to build its own store.

Alan Banks, owner of Anglo Vapour said: “It concerns me that the council are having to borrow money to attract Marks and Spencer to come here and personally I don’t feel it’s a store which people really want here, it doesn’t tailor to the Eastleigh tow centre demographic at all.

“It’s not right that the council is paying for the build either I think that’s shocking and I don’t understand why Marks and Spencer aren’t paying.

“I really don’t get why they want them here when there are already a number of big chains here and a superstore Marks and Spencer in Hedge End I see no need for it and there seems to be an awful lot of secrecy around what the council is doing, it’s worrying as a business owner in the area.”

Pip Smith, co-owner of Smith Butchers, added: “I find it staggering. They kept it all secret how much it was costing and we’ve heard rumours about rent deals and then it all comes out and they’re building the store for them.

“I wish they would build a shop for me.

"I don’t think it’s fair at all, it’s wrong and just another example of how I think they are giving out preferential treatment.

“It’s grossly unfair using public funds to fund other businesses.

"It’s using a proportion of our council tax money to entice other industry into the area.

"It’s not going to benefit me and could drive business away from local traders.”

Eastleigh MP Mims Davies, pictured below, said she is concerned by the council’s increasing debt.

She said: “I think many people will be asking why Marks & Spencer can’t pay to build its own store, especially when you consider the council doing it for them means our authority is increasing its debt mountain.

“The strong feedback I have from local traders is that they just want a vibrant and varied Eastleigh town centre with affordable parking.

"They rightly fear people will come to the store and then leave without visiting the rest of the town.

"And they’re amazed it’s happening because there is another very large M&S just down the road in Hedge End.

"I understand the council will receive rent but I do wonder what the rationale is behind taking this risk when it has such a large debt.”

Council leader Keith House said: “Our investment in property and the financial return we gain from this has meant that we have been able to protect frontline services and continue to invest in our local economy and community.

“Far from being a cost to tax payers, this initiative generates significant income for the council with the return on investment more than covering the cost of borrowing.”

A council spokesperson added that discussions to get the various permissions needed before work can commence on site are nearly completed and it is hoped work to start building the store will begin soon after that.

A previous statement from the council said: “The council, last year, approved planning permission for the development.

"The new Marks & Spencer Foodhall store will be another addition to the councils’ extensive and nationally acclaimed property portfolio that produces significant income each year.”

A spokeswoman for Marks and Spencer said they would not reveal how much the company was paying in rent as it was confidential.

She added: “We’re really excited to be bringing the very best of M&S food to Eastleigh and serving local customers.

"Plans for the new store are progressing and we look forward to sharing more details in due course.”

Dia Chakravarty, Political Director at the TaxPayers’ Alliance, said: “There appears to be a lot of confusion around this arrangement.

“Residents are entitled to raise questions and ask for clarifications, which the council has a responsibility to address.

“At a time when councils across the country are having to find necessary savings, the authorities must take particular care when spending taxpayers’ money.”