EAST Hampshire District Council’s property investment strategy is “working really well” despite setbacks, according to leader Richard Millard.

Last month it emerged the council lost £328,500 selling the Metro Inn hotel and Starbucks Cafe at the Liphook Services.

But, taken as a whole, the Conservative-majority council insisted the strategy of buying commercial property is still generating a return.

In fact, its £140 million portfolio generates a third of its revenue, more than it receives from council tax.

Labour member Paula Langley criticised the policy as it is effectively “gambling” with public funds.

Her comments came as the National Audit Office published a breakdown of local authority investment across the country.

The government body estimated councils spent £6.6 billion purchasing commercial property from 2016-17 to 2018-19. This was 14.4 times more than in the preceding three years.

Audit office head Gareth Davies said the Government needs to “look again” at the framework around how councils borrow and invest.

The district council owns the Iceland building in Alton, the Co-operative store in Four Marks, £8.1m worth of Woolmer Trading Estate in Bordon and even a branch of Tesco in Gloucester, valued at £38.9m.

In 2014, it bought the assets at Liphook Services on the A3 for £1.4m. However, they were later sold for £1.2m and incurred significant costs.

Councillor Millard said: “Overall our investment strategy is working really well and giving us excellent returns – which means we can continue to provide the very best services to our residents.

“With dwindling central government funds we decided to take bold action and launched our investment strategy. This is rigorously scrutinised, monitored by experts at the top of their field and any risks are analysed in painstaking detail.

“We are acutely aware that these investments ultimately involve taxpayers’ money and that is why we do everything we possibly can to make every single pound go as far as it possibly can.”

He said the council was “really proud” of its “balanced portfolio”.

But Cllr Langley added: “Many of the properties are not even in Hampshire and so do nothing to regenerate our towns or provide local employment opportunities.

“We certainly think that the current policy needs reviewing and the portfolio needs to be properly scrutinised and risk assessed. Is this the best value for residents?”