The property investments are being made with borrowed money, the law says the council can only spend borrowed money on assets with a life of more than one year and where it is going to make a profit or save on existing costs, meaning some of the money generated or saved can be used to meet borrowing costs. It would be illegal for the council to spend this money on day-to-day council services.
If a suitable investment property became available in Portsmouth it is likely the council would try to buy it as an addition to its portfolio, but the site would have to meet the same criteria around the risk of the investment and the expected profit that all other investments are required to.
However the profit made through rental income of the properties can be spent on any services and is currently being used to help preserve services residents use across the city such as libraries, museums and weekly bin collections.
Cllr Jones said: "We have to pay back the money we have borrowed, including the interest on the loan, so we can't spend it directly in areas that don't generate a profit. But the profits made through this scheme are already being reinvested in Portsmouth services."