Shropshire Council bought Riverside Shopping Centre without formal valuation

Auditors today urged the unitary authority to review the value of the Riverside Shopping Centre in Shrewsbury after paying £3.5 million for it.

The purchase was part of a deal completed in January that saw the council spend £52.2 million on the town’s three shopping centres.

But auditors from Grant Thornton say without the valuation they cannot guarantee that what the council paid represents the current value of the centre.

Mark Stocks told the Audit Committee: “This is a property with a commercial value and so it becomes more important you are aware of the movements each year in terms of value of that asset.

“But because it is such a small part of the deal I am not particularly concerned – I would just say to make sure the valuations are completed for next year.”

Although auditors recommended a formal valuation before the council sign off the accounts, officers have declined, saying they are satisfied with the desktop valuation.

The purchase of the shopping centres created the most “significant issues” for auditors.

Although they estimate the shopping centres will make £10.7 million income for the authority over the next five years, there are still risks around whether the properties will increase or decrease in value.

Councillor Ioan Jones said the auditors should be drawing more attention to that.

He said: “If these shopping centres lose us £2 million to £3 million, it might not be a lot of money to the council but to the people of Shropshire that is a major issue – and it is money that should not be lost.”

Councillor Peter Adams, chairman of the Audit Committee, added: “There is no room for slip-ups. We have to deliver these shopping centres otherwise we will be up the creek.”

By Emily Lloyd, Local Democracy Reporter

• An earlier version of this story said council officers had declined to say that they were satisfied with the desktop valuation. This is not the case.