A senior councillor has pledged to monitor the performance of North Yorkshire Council’s loss-making housing company after approving an additional £2 million loan to the firm.

Brierley Homes, which was founded in 2017, is part of the Brierley Group of 12 companies owned by the council.

The firm reported a £3.2 million loss for the last financial year and has faced issues over cashflow and payment to suppliers.

Yesterday (September 16), senior councillors on the council’s executive approved a further £2 million loan facility to the company in order to provide additional financial headroom. The new loan is subject to a market rate of interest of 6% above base rate.

The move will be in addition to the £25 million loan facility already available to Brierley Homes — of which the firm has already used £24.5 million.

'Jury is still out'

Cllr Gareth Dadd, deputy leader and executive councillor for finance at the council, said the council would monitor the company’s progress amid the further financial support.

He pointed out that despite the losses reported at Brierley Homes, the Brierley Group of companies as a whole had recorded a pre-tax profit of £3.2 million in the 2024/25 financial year.

Cllr Dadd said:

Cllr Dadd added that the executive would continue to hold the company to account and monitor its performance.

His comments came after Gary Fielding, the council’s corporate director of resources, confirmed that he would receive weekly cashflow reports from the company as part of “additional due diligence”.

Mr Fielding said the weekly reports would “ensure there is stronger due diligence” into the firm.

He added that any amount drawn down on the loan facility would have to be approved by himself in consultation with the council leader, deputy leader and chief executive of the council.

Independent review

Meanwhile, the move to approve an additional loan facility to Brierley Homes comes after council officials commissioned an independent external review of the company’s operating model, structure, financial position and resilience.

The review came amid criticism from opposition councillors that the firm was reliant on large sums of money from the authority.

Tony Dodds, a real estate expert who runs Northumberland-based Tony Dodds Consulting, carried out the review, which was put before senior councillors at yesterday’s executive meeting.

In his findings, Mr Dodds said Brierley Homes is business which is based on a “sound operating model” and has “an achievable goal” to build new homes for profit.

He added that the company had endured a difficult trading period and “poor project management”.

Mr Dodds said the company has a “positive impact” on the county and there was “no reason” to cease trading the firm or change its operating model.

The review made a range of recommendations, which included review of the company’s loan terms, use of private sector funding structure and a change of the firm’s project appraisals.

The additional loan facility takes the company’s total commercial borrowing from the council £27 million.

Last month, the council also granted a £1.4 million loan to the housing company to assist it with cashflow while it delivered affordable housing and to "allow the company time for sales to be received”.

The council said the loan will be repaid with base rate interest instead of on commercial terms.

But, the move was criticised by Cllr Kevin Foster, leader of the Green and Independents group on North Yorkshire Council, who questioned how the council could justify further money for the company.

However, senior councillors on the authority’s Conservative-run executive said the decision was the “right thing to do”.