Cambridgeshire County Council is ‘red flagging’ its commercial investments anticipating “primarily lower than expected income, particular in its wholly owned housing company This Land”.
Tucked away in a series of reports being considered by the strategy and resources committee tomorrow (Thursday), officers warn that it “is prudent to forecast a pressure in this area, as by year-end the current position of the company will be clearer following the submission of its full business plan to the council in November.
“This may necessitate support to the company or a further earmarked reserve provision by the council, otherwise this forecast overspend will be unwound”.
Reports to the committee explain that This Land has previously been issued with £127m of loans and £5m of equity.
“The final loan included a drawdown facility that was never utilised for £6.3m; based on their current cashflow position,” says one report.
“This Land have now requested to draw this down, which was agreed by strategy and resources committee in July. The scheme is forecasting expenditure of £6.3m in 2024-25, prudential borrowing of £5.9m and £400k of equity.”
Public and press were excluded from the July meeting when a ‘This Land -Monitoring and Financing’ report was discussed.
PRESS AND PUBLIC BANNED FROM MEETING
The statutory resolution approved by the committee advised that “it would not be in the public interest for this information to be disclosed information relating to the financial or business affairs of any particular person (including the authority holding that information)”.
Minutes record that “the committee received a report on This Land – Monitoring and Financing. It was resolved unanimously to agree the recommendations set out in the report”.
One bright spot for This Land is that it has finally secured planning consent for 540 homes on the outskirts of Soham.
However, realising the value of the site will not show early benefits although This Land is promoting its Eddeva Park scheme of 230 homes, overlooking the Gog Magog Hills and open fields just south of Cambridge.
Cambridgeshire County Council is due to receive the annual business plan from This Land in November, which it says, “will provide a detailed overview of the company’s outlook and performance”.
Tomorrow’s committee will be told that “while we anticipate being on budget for income from This Land in 2024-25, there is a risk that we will not be and even if we are, it is likely to be prudent to transfer additional funds to earmarked reserves to further mitigate any risks in the medium-term.
“It is prudent at this stage to assume that the income budgeted to be received from the council’s wholly owned housing company will not be fully received.
THIS LAND BUSINESS PLAN DUE IN NOVEMBER
“The company is revising its business plan and will present this to the council later this autumn. This income was time-limited in any case and is due to come to an end in the current medium-term plan; this line re-phases that.”
Councillors approve 540 homes and new medical centre for Soham
On its website This Land interim chief executive David Meek says: “This Land is an established real estate developer with a track record of delivering sustainable, high quality homes which benefit local communities and are not just built for profit.
“Wholly owned by Cambridgeshire County Council, we provide substantial income and benefits to our shareholder and the communities which they serve.
“Importantly, impact on the local environment and infrastructure are critical factors to our design thinking and consequently the overall exceptional quality of all that we do.
“The partnership between this Land and Cambridgeshire County Council provides the company with the stability and funding of a significant stakeholder and has provided the council with income of over £40million in interest payments from this Land since it was established.
“This strong alliance ensures that non-commercial priorities are equally matched, including our focus on more affordable housing, wider community benefits and higher quality products.”
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