Uttlesford District Council is in the process of signing a deal with a defence company, potentially tying its commercial strategy to an arms trade that stands accused of complicity in war crimes and genocide.

In a private session that excluded the press and the public, the council voted to borrow £35mn to help an unnamed defence industry company build a new headquarters, warehouse and research facilities. The property will be outside the local area, so it will not generate local jobs. This is part of the council’s bid to generate income from a £300mn commercial real estate portfolio it is creating, which it hopes will offset cuts in funding from central government.

British arms companies such as Raytheon and BAE Systems have provided defence supplies to the Saudi regime, which have been used against Yemeni civilians and caused a devastating humanitarian emergency

The decision to invest in the property was recommended by the so-called “investment board”, a cabinet working group that is dominated by the ruling Residents for Uttlesford Party and meets in private.

Known as “Investment Opportunity 12”, the council has agreed to acquire a forward funding deal for the property which, when completed, would see the tenant sign a 35 year lease with rent of £1.56mn per annum. The build was scheduled to start in January 2021 and would take 19 months to complete. The “investment board” was told “the developer had an option agreement on the site that expired on 31 January 2021 and both they and the tenant were keen to find a funding partner.” The investment board’s public minutes note that: “Due to the company’s involvement in the defence market, members debated the need to balance the importance of expanding the Council’s property portfolio with the ethics risks of the investment.” Commercial interests obviously prevailed over the ethical risks!

Ethical concerns raised by opposition councillors in a private extraordinary council meeting were batted away by the R4U administration. Opponents of the investment highlighted the “specific links between the town of Saffron Walden with the Quakers and pacifist movements” and “personal conscience aversion to certain industries.”

Cllr Patrick Lavelle (R4U, Great Dunmow South & Barnston), as the seconder of the motion in favour of the investment, said that “if an Ethical Investment Policy had been in place then this would have been likely to pass the test as it involved investment in land and buildings rather than investment in a specific company.”

Yet, the defence company is relying on Uttlesford as a “funding partner” for its headquarters because the council can use its sovereign-rated status to borrow at very low rates. Uttlesford’s role is not as a passive landlord that is ethically distanced from the activities of its tenant, but an active investor in facilities designed for the arms company.

Cllr Ayub Khan (Lib Dem, Stansted South & Birchanger) volunteered to help create an ethical investment policy, but by the time it is in place the council’s investment programme will be completed. It is unclear whether the council would be required to divest from assets deemed contrary to the ethical policy.

I have put a number of questions to cabinet member for finance Cllr Neil Hargreaves (R4U, Newport) and chair of the “investment board” Cllr Neil Reeve (R4U, Broad Oak & The Hallingburys) relating to due diligence, ethics and the council’s client’s exposure to war crimes, but they have not yet responded.

The income from this investment will be tainted with the blood of innocent civilians who die in conflicts that are supplied and sustained by the arms trade. For more information on links between the arms trade and human rights abuses, visit Campaign Against the Arms Trade.

There are thousands of properties available across the country and potential investments in our district, which could help generate and support jobs at a time when the aviation industry has been hit by the pandemic. Why choose something that is highly charged with controversy?

Having failed to establish a proper ethical exclusion list, which is standard for any publicly owned investment fund, Uttlesford District Council has instead chosen to involve itself the grubbiest industry, knowing full well the likely objections among many residents.

The decision is particularly insensitive to those in the community who are refugees from conflict in the Middle East, those with a pacifist moral standpoint (Saffron Walden’s cultural heritage was forged by the Quaker community), and others who simply think that public money should not be bound up with the global arms trade.

I have drafted a petition which will soon appear on Uttlesford District Council’s e-petition page. It will state:

We note with alarm the decision taken by Uttlesford District Council to approve £35mn to fund the construction of a commercial property – including a new headquarters, warehouse and research facility – for use by a defence company, as part of the council’s £300mn commercial real estate investment programme.

We also note that the council has yet to adopt an ethical investment policy, which may prevent such controversial investments going ahead.

The decision raises serious ethical concerns given the ongoing controversies over British arms sales to repressive regimes implicated in war crimes.

We call on the council to cancel the investment, which offends the ethical and moral beliefs of many local residents. The council’s commercial investment strategy should avoid any ethical risks.