Row over Torbay Council investing in Amazon warehouse

Councillors set to reject £15m investment

The council has been considering buying the new centre which is due to be built alongside the Lidl distribution warehouse on the Exeter Gateway site near the M5.

But after Liberal Democrats publicly raised concerns about the impact of the internet giant on traditional town centres, its working practices and tax record, the council’s Conservative group has revealed it is also against the investment plan.

A decision was taken by the authority’s Investment and Regeneration committee in private to investigate buying the centre.

Amazon has been linked to the site, but the business has refused to confirm it will be the tenant and a spokesman declined to comment on the issues raised by Torbay councillors.

The council has a £200m commercial property investment strategy to raise extra income to offset funding cuts. Next year it is expected to bring in £3.6m to help run services, but the strategy is controversial with critics claiming it is high-risk.

The controversy over the Amazon deal follows concerns raised about the council’s recent £3m investment in a factory used to make Cornish pasties at Bodmin.

The council’s Conservative group leader Dave Thomas issued a statement ahead of a meeting on Tuesday afternoon, saying the committee was now unlikely to go ahead with the Amazon deal.

Cllr Thomas cited the impact of the online retailer on traditional high street traders, as well as echoing the Liberal Democrat concerns about the company’s corporate  tax payment record.

He said investment decision had to meet guidelines and bring multiple benefits to the people of Torbay.  

Investigations into the Amazon deal had raised issues which meant it was unlikely to go ahead as it did not have the support of the Conservative group.

Cllr Thomas said: “We are clear that if we do not invest, another investor will take our place and the Amazon scheme will still go ahead, however we are mindful of the views of our residents and feel that the council should not invest within a company that is currently causing so much damage to our high street and tax ethics that are still open to question.”

Cllr Thomas said he was disappointed the Liberal Democrats had raised publicly what was being dealt with in private ahead of a final decision, expected to be taken at a meeting of the investment committee on Tuesday afternoon.

He said the Conservatives had raised concerns with council officers over a month ago, but investment decisions were a “private matter” until final decisions were taken.

Liberal Democrat Nick Pentney highlighted the Amazon investment at a public meeting of the full council last week.

The potential £15m deal was listed in a document attached to the mayor’s capital strategy which was opposed by councillors.

Cllr Pentney said: “As a town centre councillor, local business owners tell me how they are really struggling in the face of increased online shopping through the likes of Amazon.

“Many will wonder why, at a time when the council is failing to properly invest in our towns or deliver basic services, they are investing in warehouses that are leased out to Amazon?”

He added: “Having a working relationship with Amazon whilst our high streets are suffering is seriously questionable.”

Liberal Democrat Mandy Darling raised concerns about allegations of poor working conditions in Amazon centres and questioned the record of the business in paying corporate taxes.

The new distribution centre is due to built in the Exeter Gateway area to the east of the city near the M5, alongside the giant Lidl warehouse.

Recent investments by Torbay Council include The Range at Babbacombe in Torquay and a Cornish pasty factory at Bodmin in Cornwall.

Its properties include the Wren Park retail centre in Torquay, EDF Energy’s HQ in Exeter and a distribution warehouse in Kent.

The council said: “Everything we invest in is rigorously assessed before being considered and we seek independent advice to ensure our Investment and Regeneration Fund is being used wisely.”

Torbay has seen cuts of £76m in government funding over the last seven years, and is looking for £17m of savings and extra income over the next three years.

The Conservative group is the largest on the authority but does not have a majority. The council is run by an elected mayor and an executive of independent councillors, but that will change to a leader and cabinet system after local elections in May.