Somerset Council's commercial property losses would have been enough to repair around 65,000 potholes, opposition Conservatives have claimed.

The claim was made as councillors clashed over the authority's commercial investments, which were inherited from Somerset's former district councils when the unitary council was created in April 2023.

Since then, Somerset Council has been selling surplus land and property, including commercial investments bought by the former Mendip, Sedgemoor, Somerset West and Taunton, and South Somerset district councils.

The government has allowed the council to use money from asset sales to fund front-line services, which is not normally permitted. That arrangement is currently due to end after April 2027.

Cllr Diogo Rodrigues, leader of the Conservative opposition group, criticised the council's record on asset sales when Somerset Council's Executive met in Taunton on Wednesday, 1 July.

He said the council was projected to lose around £90m on its commercial property investments and asked how much borrowing remained outstanding on properties that had already been sold.

Cllr Rodrigues pointed to the Steelite site in Stoke-on-Trent, which he said was bought by the former Liberal Democrat-run Somerset West and Taunton Council for around £21m and later sold by Somerset Council for around £14.4m.

He said: "Based on the council's own figures, that would have been enough to repair around 65,000 more potholes across Somerset.

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"Selling assets at a loss while keeping much of the debt attached to them is the equivalent of selling a house for less than you paid for it, not paying off the mortgage and being saddled with the debt."

Figures published before Somerset Council's audit committee met in late May showed the council had recorded a total loss to date of £91,853,000 on the sale of 28 of the 48 commercial investments it inherited from the former district councils.

When measured only against purchase price and eventual sale price, just six of those 28 sales made a profit. The largest was just under £1.5m from the sale of the B&Q store in Glastonbury.

However, the picture changes when rental income is included. On that basis, 21 of the investments generated a net profit for the council, with the strongest return being around £4.4m from North Shields Retail Park near Newcastle-upon-Tyne.

Responding for the Liberal Democrat administration, deputy leader Cllr Liz Leyshon, who represents the Street division, said the assets had generated "a very considerable income" while they were owned by the council.

She said: "It's important to point out that these assets generated a very considerable income while they were in our ownership, and those figures are available to all division members."

Cllr Leyshon said the council had been given a capitalisation direction by central government, allowing it to sell commercial investments and use the receipts to fund essential services.

She said that without that permission, the council's chief financial officer may have had to issue a Section 114 notice, which is effectively a warning that a council cannot balance its budget.

She said: "Without that capitalisation direction, our chief financial officer potentially would have needed to issue a Section 114 notice, which would have led to expensive government commissioners to take more drastic action, leading to what I would call a fire sale.

"Instead, we've been able to sell off assets in a managed way to achieve the best possible results, while also protecting key front-line services and reducing the need for further support."

The council has sold around 60 per cent of its wider asset portfolio so far, raising more than £125m. That is around £8.6m, or seven per cent, above the assets' original valuation.

But when the original purchase costs, borrowing and falling valuations are taken into account, the overall loss remains substantial.

Somerset Council inherited 48 commercial properties bought for £310,226,000, including fees and stamp duty. Only around a quarter of those assets were in Somerset.

The portfolio included retail, industrial and business sites such as B&Q and Costa Coffee in Glastonbury, Street Retail Park, Street Business Park, Marks & Spencer in Yeovil and part of Commerce Park in Frome. It also included sites much further away, including Bristol, Gloucester, Birmingham, Cardiff, Glasgow, North Shields and Stoke-on-Trent.

A further five assets are currently under offer, with a combined guide price of more than £24m.

The council must also repay borrowing used to buy the commercial properties. Cllr Rodrigues asked how much of that borrowing remains outstanding on assets that have already been sold, with the administration saying a full breakdown would be provided in writing.

Any assets sold after April 2027 cannot be used directly to fund front-line services unless the government grants Somerset Council further permission.

Original reporting: Daniel Mumby/LDRS

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