Cambridgeshire council plays down fears over £120m housing loan
This Land has said it "acknowledges the concerns" and was focused on completing its existing developments.This Land was set up by the county council and it claimed to have facilitated close to 1,000 homes, either by directly building them or by selling land.It has been financed by council loans, with £120m outstanding.The authority's auditors KPMG recently warned: "Due to the declining performance of the This Land group there is an increased risk that the entity will be unable to recover the full value of the loan."
Michael Hudson, the council's executive director for finance, said it was now due to receive back £126m, having restructured finances, including converting nearly £60m into a grant which would be repaid dependent on future performance.But Tong said the council had been "given their money in order to improve the roads, improve the streets, improve their lives, but this money is instead wound up... in the hands of a company which, frankly, are failing".He accused the council of "effectively" writing off the grant.Mr Hudson said "like any construction and development company it takes a number of years to get moving".When asked where the money had gone so far, he said "a large element has gone into paying back the interest to the county council", and reassured residents that money would not be lost.He said the company had "provided Cambridgeshire with affordable housing" and that the "income received enabled this council not to have to make as many difficult financial decisions as other local authorities around the country".This Land's interim chief executive Rob Williams said since the auditor's report it had "worked closely with the council to complete a restructure of the company's financing to address issues raised and ensure there is a sustainable and appropriate financial approach going forward".He added: "Under the proposed plan, This Land will return to the council at least the equivalent of the original cash investment over the loan's lifetime, through a combination of loan repayments and interest payments, ensuring that council taxpayers have not lost money."The Liberal Democrats, who run the council, have been contacted for comment.
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