Subscribe to trusted local news
If you are accessing this story via Facebook but you are a subscriber then you will be unable to access the story. Facebook wants you to stay and read in the app and your login details are not shared with Facebook. If you experience problems with accessing the news but have subscribed, please contact subscriptions@thestrayferret.co.uk. In a time of both misinformation and too much information, quality journalism is more crucial than ever. By subscribing, you can help us get the story right.
- Subscription costs less than £1 a week with an annual plan.
Already a subscriber? Log in here.
18
May
Taxpayers could face £7 million loss on council housebuilder Brierley Homes
Opposition councillors have warned that taxpayers may not get their money back from North Yorkshire Council’s loss-making housing company.
Council-owned Brierley Homes is forecast to make a loss of £7.47m in 2025/26 — despite a profit of £704,000 being forecast.
The council has blamed the poor performance on income from sales being lower than expected, increased costs and delays in the completion of homes, leading to increased overheads and interest charges.
Following years of poor performance, a new managing director was appointed in February and a plan put in place to restore the company’s fortunes.
Council chiefs have previously agreed a £27 million loan facility for Brierley Homes and they are now warning that £7 million of this may still be outstanding in five years time.
The council has set aside a £7 million reserve in case the loan is not fully paid in a move senior officers say is a “prudent” step to minimise the risk to the authority.
Councillor Peter Lacey.
But Liberal Democrat councillor Peter Lacey, leader of the opposition, said it meant taxpayers could “end up paying the price for the mess at Brierley Homes”.
He added:
People will be shocked to see the council now setting aside £7 million because it may not get all of its money back.
At the same time, the council says it is struggling to cope with rising costs in children’s services and adult social care.
Residents will rightly wonder how things were allowed to get this bad.
Councillor Steve Shaw-Wright, leader of the Labour group on the authority, called for the company to change direction and build more affordable homes and council houses “rather than the £500,000-plus houses they currently do”.
He added:
It’s well before time that those in power swallowed their pride and change direction now, before the mountain of debt becomes unmanageable.
Green Party councillor Arnold Warneken said:
This is the clearest sign yet that the council no longer expects to recover all of the £27 million lent to Brierley Homes.
It’s time for some straight-talking from the council because they can’t have it both ways – they treat it like a private company when scrutiny is uncomfortable, and yet they rely on taxpayers to foot the financial risk when things go wrong.
Council response
Brierley Homes is one of 12 council-owned companies within the Brierley Group.
The group as a whole is expected to record a profit of over £3 million.
The council said its commercial operations remained good value for money and were returning a healthy profit, which was invested in frontline services.
A spokesperson added:
Overall this year, that represents in the region of £3.2 million and that’s after taking into account the in-year estimated loss for Brierley Homes.
Given the financial position of the company, a provision of £7 million has been made by the council should it be needed.
Brierley Homes, despite its losses, gives us the opportunity to provide much-needed housing with more flexibility, including providing more affordable homes in partnership with Broadacres, the redevelopment of brownfield sites and potential opportunities around our own rental and shared ownership schemes helping people get onto the housing ladder at a very difficult time.
Things are not always as straightforward as profit and loss, and we have to look at our wider responsibilities around providing affordable, accessible homes for people across the county.
It’s prudent that we recognise the financial issues which the company is experiencing and put a plan in place to minimise further risk to the council, hence the offsetting of potential losses against the income from the rest of the Brierley Group.
The company’s finances will be discussed by the executive committee at a meeting next Wednesday.
0