Attempt to reduce borrowing limit of Newport council's planned £50million investment fund defeated

The council agreed to move forward with the new approach which could include using the fund to invest in property in Newport and elsewhere at a meeting on Tuesday.

The Labour-led authority says the priority of the money-making scheme will be to promote "social values", while also being used to support funding of core services and promoting economic growth.

But members of the council's Conservative group called for a "more prudent way forward."

Cllr Matthew Evans, leader of the group, put forward an amendment to the plans - to halve the proposed borrowing limit from £50million to £25million.

While welcoming a more commercial approach, Cllr Evans said halving the borrowing limit would offer a more 'safe' approach and mitigate risks.

Cllr Matthew Evans

He said: "You could go to the bookies and say this is a risk, but if we put £50million on it we are going to get a bigger return.

"But if that horse loses, then you are going to fall from a far greater height than if you just put £25million."

However council leader, Cllr Debbie Wilcox, said that a "substantial amount of money" was needed to make the plan work.

Cllr Debbie Wilcox

Cllr Wilcox said the £50million fund could bring a return of around £1million, but that a £25million fund would halve the return.

Finding new ways of making money is a priority for the council as it attempts to find £30million of savings in the next three years.

"Standing still is not an option," Cllr Wilcox said.

"Doing nothing is not an option."

Newport Independent Party councillor Chris Evans warned the council to be cautious as it developed the plans.

Conservative David Williams also voiced concerns, saying: "These are not core activities, they are not the type of things councils should be involved in."

But Labour's Herbie Thomas said the council had to find a new approach to help deliver services.

"It's a very great shame to some extent that we have to go this way because we have been poorly funded," he said.

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An investment board, made up of senior councillors and officers, will be set up to oversee commercial activity under the plans.

Aside from property, the council will consider providing other services, such as energy and trade waste, on a more commercial basis.

A trading company through which commercial activities are managed could also be set up, subject to a £100,000 feasibility study.