Council offers £21 Million to housing company that lost council money

23 June 2020

Today’s meeting of Norwich City Council is set to see a loan facility of ‘up to a maximum of £21 million’ offered to the council’s wholly-owned house-building company, Norwich Regeneration Ltd (NRL). The company is already able to borrow £11.4 million from the council in order to build houses which can then be sold on the open market. The additional millions will cover NRL’s losses so far and allow a change in direction so that more desirable houses are built first to encourage sales.

Green councillors supported the original aims of the council-owned company, to build good quality housing in Norwich and to ease the financial pressure placed on the council following the withdrawal of central government grants. However, they have been increasingly frustrated by conflicts of interest, a lack of appropriate governance and a lack of appropriate expertise in the decision-makers steering the company on the council’s behalf.

At today’s meeting, Greens will call for the resignation of the two city council cabinet members who sit on the NRL Board, claiming that they should not have been at the top of two separate organisations when one was asking the other for loans.

Councillor Paul Neale, shadow portfolio holder for housing, said:

“I would have liked to have seen at least three industry-experienced non-executive directors taken on at NRL, as is best practice and so decisions could be made fairly without being dominated by cabinet members. Those cabinet members who are also directors of the company should choose one position or the other now.”

Councillor Ben Price, the Chair of Norwich City Council’s Audit Committee, said:

“I’ve expressed concern on a number of occasions that the council did not have the expertise or the governance in place to run a company like NRL without drawing on experts to help mitigate the risk to its investment. I’ve been consistently told that my concerns were unfounded. I was shocked at a cabinet meeting less than two weeks ago when a cabinet member admitted to only now starting to understand the decisions the cabinet had been making regarding NRL. The cabinet needs to understand the decisions it is making, admit the necessity of employing experts and listen to the heartfelt concerns of opposition councillors when taxpayers’ money is at stake.”

 

Notes:

The Green Party Group on Norwich City Council forms the council’s main opposition and consists of eight councillors.






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