Norwich City Council owned housing firm recorded losses of £5m
The company, which is wholly owned by the council, was founded as Norwich Regeneration Limited in 2015 in the hope of delivering more affordable housing.However, the venture has faced strong criticism, particularly after the Eastern Daily Press reported in 2020 that the company had lost £6m when homes in Bowthorpe were sold at a loss and the council was overcharged.The council also invested £3.5m in the company and loaned it a further £6.1m to keep it viable.Whilst no accounts have been filed for Lion since 2023, Companies House records show it made losses of £5m in the previous five years.
Catt, who leads the council's Green group, said "the lack of openness displayed by the Labour councillors who have overseen this disaster that has led to this enormous loss for the public has been striking"."There needs to be a full and public investigation into how this was allowed to happen, and a plan from the council for how it will deliver housing for Norwich at value for money after this failure," he said.
'No impact'
Carli Harper, Labour's cabinet member for finance and major projects, told the Local Democracy Reporting Service that liquidating the company was "a strategic decision that makes sense for the long-term".Rather than using a private company to borrow money to fund developments, she argued the council could get better deals on loans from the government."It means we deliver more homes at better value for money for the taxpayer if we do it ourselves," she said.She said the closure of the company would have "no impact" on a planned development of 200 houses at the former Mile Cross depot – while the council was "exploring options" for continuing another development in Bowthorpe, where a total of 1,000 homes are expected to be built.She added the council hoped to get back some of the £6.1m loaned to Lion by recovering assets owned by the company including "a significant plot of land". The council's cabinet will be asked to consider voluntary liquidation of the company at a meeting next week in light of a recommendation received from its shareholder panel.It states the council will explore "alternative routes" to invest in housing development that are "less risky" and provide "better prospects".
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