RENTS collected from Newport Leisure Park will secure funding for future services in Monmouthshire, according to the chief executive of Monmouthshire County Council (MCC).

Paul Matthews said the site would help MCC maintain "valued front-facing services" in the face of shrinking council budgets.

MCC announced its acquisition of the leisure site, on Newport's Spytty Road, on Monday. The authority borrowed £21 million to finance the purchase.

But while MCC believe their purchase is a shrewd investment, critics have called the move a "gamble".

The 141,000-square foot property – adjacent to Newport Retail Park and the Tesco Extra supermarket – is fully-let and includes a 13-screen cinema, gym, discount superstore, indoor adventure park, and a range of restaurants such as Pizza Hut and Harvester.

Speaking to the Argus, Mr Matthews said the council expected an initial net return-on-investment of 6.29 per cent.

When asked why MCC had decided to invest in sites in Newport, rather than in Monmouthshire, Mr Matthews said the authority was "limited to where viable commercial opportunities present themselves".

He added: "We considered a number of potential investments, however Newport Leisure Park was the best opportunity available to generate a revenue return and create a blended portfolio to mitigate risk exposure."

Earlier this week, MCC described the site as a "prime location in South Wales", citing numerous housing developments in the area and the proximity to the potential route of the planned M4 relief road.

But while MCC sees the acquisition as a safe bet on future returns, there has been a mixed reaction from the public.

Some have praised the council's foresight and willingness to work around shrinking budgets, while others called the move a "gamble" and a "very odd" investment.

These concerns were also raised by Monmouthshire county councillor Armand Watts (Labour,Thornwell) who said the news had come as a complete surprise.

"They don't understand people are hurt by the council tax increase," he said, citing news of the 5.95 per cent rise announced by MCC.

"[MCC] is bleating all the time it's the most underfunded council in Wales, and now they've gone and spent £21 million.

"It begs the question of what the risk is to the public purse. They are a public service provider, not some Gordon Gekko venture capitalists."

Cllr Watts also said MCC was "fundamentally rubbish" at capitalism, based on losses recorded after concerts in Caldicot Castle and the community interest company CMC2.

"Why not spend the money on more immediate things like stopping teachers being made redundant or the crisis in adult social services?" Cllr Watts asked.

When asked what MCC had to say to people who thought the acquisition of the leisure park was a gamble, Mr Matthews told the Argus: "In order to maintain our valued front-facing services, despite continuing to receive an annual fall in funding, we have taken the decision to generate income streams through commercial property acquisitions.

"This avoids us having to cut services or increase council tax beyond the levels already indicated. We ensure that we have the support of expert professional advisors, undertake robust due diligence and are sighted on both the opportunities and risks."

He added: "The whole purpose of this acquisition is to generate a revenue stream that would not have otherwise been available so that it can be used to fund much valued services."