Leading figures at North Yorkshire County Council, which is striving to offset council tax rises by launching numerous commercial ventures, have spoken of their optimism that the firms’ collective losses of £639,000 last year would be redeemed by their profits in the coming years.
North Yorkshire County Council director Gary Fielding said the losses experienced by its Brierley Group firms, such as housebuilders Brierley Homes, needed addressing after being repeatedly challenged over the extent of the black hole by one of the Conservative-run council’s Tory members.
A meeting of the authority’s shareholder committee heard the group was not “a money pit” at which taxpayers money was being thrown without being properly accounted for.
Officers and executive members offer a range of explanations as to why the group of firms, which includes ones offering schools, auditing, waste and legal services, had gone into the red.
Members were told the Covid-19 pandemic had been “tremendously difficult” for the schools’ catering, as kitchens had been kept open for the small number of pupils attending during lockdown.
Councillors heard the £639,000 loss over the last financial year was just a temporary position as some of the council’s firms worked on long-term ventures, such as housebuilding.
Officers added the authority would be able to offset its tax position at a group level, utilising the losses of some of its ventures against its profitable ones, to be as tax efficient as possible.
Mr Fielding highlighted that some of the council’s firms had accumulated profits over several years.
He said: “This is part of the rhythm of commercial activity. You don’t always have positive years and this has been an exceptional year. I think we just need to hold our nerve and look at that in the broader perspective.”
However, Councillor Mike Jordan replied: “A loss is a loss and at the end of the day we started these companies not just to provide a service, but to offset having to raise council tax. That’s one of the things we’re trying to do which we’re not going to do.”
Mr Fielding responded: “If we weren’t worried about losing money that would not be natural and we would be accused of being complacent.”
The council’s finance executive member Councillor Gareth Dadd then said alongside aiming to limit council tax rises, the ventures were set up to provide services.
The meeting heard the council had calculated that the firms had generated £5.2m of shareholder value in 2020/21.
The council’s chief executive Richard Flinton said the diversity of the group had helped the authority into a better position than the one many other councils were facing.
He said the some of the firms were providing unique services for the county. Without the broadband firm NYNet, the meeting heard, many people in North Yorkshire would not have received superfast broadband.
Mr Flinton said Brierley Homes was “a potential disrupter to the market” as it would be more prepared to move forward with developments faster than some major building firms, responding to the need for homes.
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