These simple structures on this famous stretch of Dorset coastline are highly sought after, with typical waiting times for a long-term tenancy ranging from five to 20 years. But some users are now worried about plans by borough chiefs to cash in on the huts by selling them to a ‘special purpose vehicle’ (SPV) to boost their budget with a £54m windfall. The financial plan proposed by Conservative-led Bournemouth, Christchurch and Poole (BCP) council includes selling the huts to a company controlled by the authority. It will create a large capital receipt for the council for new investment. The proposed arrangements are facing heightened scrutiny, with questions being raised in parliament about the plan and local backlash. Mike Cox, a local Lib Dem councillor, said: “This is the worst kind of casino capitalism and people are horrified by it.” He described it as the kind of scheme that Gordon Gekko, the anti-hero in the 1987 film Wall Street, would come up with. The value of many of Britain’s beach huts has skyrocketed in recent years. The council has already built 131 larger ‘super huts’ over the past decade, which have been sold for around £40,000 each, raising more than £5m. Some of the UK’s most expensive beach huts can be found on Mudeford Sandbank in Christchurch. The Observer said one of these recently sold for more than £500,000. It is about 20 minutes’ walk from the road, with a fitted kitchen, a sitting room that can be converted into two double beds and a mezzanine. Lizzie Manetta, 60, who pays £2,700 a year to rent a hut in Poole, is among long-term beach hut users concerned about the proposed scheme. He said: “I’m worried because it’s already expensive to have a beach hut and it will limit who can rent it if they raise the prices.” He added that the huts needed to be looked after and were a valuable asset to the local community. He said: “One night this week I went down to the beach, had a bath, made dinner and then I saw the sky go from this lovely blue to a pale pink. It’s amazing.” Holidaymakers and huts on Boscombe Beach, Bournemouth. Photo: Adrian Sherratt/Alamy Under the plan, the 3,605 beach huts in Poole, Bournemouth and Christchurch would be transferred to the new company in a deal largely financed by third-party debt. The huts are council rented or privately owned with an annual ground rent. The new structure would provide a device whereby the council could exchange annual rental income – worth around £5m a year – for a large lump sum payment. The council has not disclosed the financial and consultancy fees involved or any proposed rent increases. The plan, devised with support from professional services firm KPMG, was approved in principle at a council budget meeting in February. Detailed proposals will be discussed later this month. A council document outlining the scheme says: “As the SPV is owned by the council and once the original debt has been repaid, this means that at the end of the 20-year period the council could wind up the entity and return the assets to its control board or could choose to refinance the assets again.” The project is described as a “bold, non-traditional approach to local government funding”. It is proposed that the money will be used for adult and children’s services and the council’s ‘transformation programme’, which increases the digitization of services. A ‘save our beach huts’ group has been set up on social media in response to the plans. Campaigners want to see KPMG’s report on the scheme, two independent valuations of the beach huts and a full business plan of the proposed SPV. Sir Christopher Chope, the Conservative MP for Christchurch, last week raised questions in parliament about the proposal. It wants to be reviewed by officials to check whether it complies with local authority guidelines on capital collections. Chope said: “This seems an extraordinary course of action because it appears to go against the principles of local government to protect the interests of council tax payers.” He said the concern would be the quality of service provided to beach hut users by the new company and potential rent increases. The BCP board said: “The motion to investigate a [SPV] to make our beach huts more commercial was approved as part of the 22/23 budget. No official decision has been made. “We are working on details of how we could use a special purpose vehicle and a report is scheduled to go to Cabinet [this month]. This includes any impact on rents and investment opportunities.” KPMG declined to comment.
