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May 2021

Last Updated: 20/05/2021

Politics

County council's trading company records £639,000 loss

by Stuart Minting Local Democracy Reporter

| 21 May, 2021

North Yorkshire County Council defends its decision to set up numerous companies to raise money for frontline services despite making a loss during the covid-affected year.

A Brierley Homes development in Bilton.

North Yorkshire County Council's trading arm, The Brierley Group, recorded a loss of £639,000 last year.

The council has created numerous companies to generate funding for frontline services.

The authority’s leader and deputy leader, Councillors Carl Les and Gareth Dadd, defended the strategy ahead of the council’s first meeting to discuss the group's performance during the first year of the pandemic.

An officers’ report to the meeting said the ventures, to which the council has committed to loaning some £54 million at preferential rates, had seen a continued “mixed performance” from the previous year.

Provisional figures show the group, which includes education and business services, housebuilding, internet, legal and waste enterprises, delivered a loss after tax for the 2020/21 financial year of £639,000.

The report stated the total revenue generated of £59.9 million was under budget by £4.8 million.

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Officers said North Yorkshire Education Services faced unique challenges throughout the year, and that the pandemic had an adverse impact on the school catering business due to school closures.

While First North Law’s trading in the first half of the year resulted in a £14,000 underperformance, officers said broadband provider NYnet experienced some challenging trading conditions throughout 2020-21, particularly with regard to new customer sales.

The report states waste management company Yorwaste performed well during the last quarter despite trading continuing to be difficult and the business services Veritau group exceeded its budgeted profit for the year.

Cllr Les said:

“The pandemic has had an impact across not only the council, but the council-owned companies and we are looking at the business plan for the future post-pandemic.”

He said he was optimistic about the firms staging a recovery this year, providing covid variants did not have a major impact on the county.

Cllr Dadd, who is also the council’s finance executive member, said he was proud of what the authority had achieved with its commercialisation agenda.

He said:

“It’s been done in a cautious manner, but nonetheless has provided and post-pandemic will provide vital resources to the county council’s budget on behalf of the taxpayer.

“We are not risking millions and millions like other authorities, which are buying shopping centres. We are taking a cautious, level-headed, reasonable approach to this and any extra funds goes into support services, especially for vulnerable people, and that’s why we’re keen to pursue it."

He added the authority had a better chance of getting a variety of work done than many if not all other councils because it was the firms’ shareholders, so they had to perform for the authority.

Cllr Dadd said:

“Their focus is entirely on service delivery to make profit or reach what the residents of North Yorkshire expect. It’s had a positive effect on service delivery.”

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County council's trading company records £639,000 loss

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