North Yorkshire County Council defends loss-making commercial strategy

County Hall in Northallerton.

North Yorkshire County Council has defended its strategy to create numerous companies to generate funding for frontline services after a report revealed the tax-payer backed ventures had been hit hard by Covid-19.

The authority’s leader and deputy leader, Councillors Carl Les and Gareth Dadd, were speaking ahead of the council’s first meeting to discuss the performance of its Brierley Group of firms through the first year of the pandemic.

An officers’ report to the meeting said the ventures, to which the council has committed to loaning some £54m at preferential rates, had seen a continued “mixed performance” from the previous year.

Provisional figures show the group, which includes education and business services, housebuilding, internet, legal and waste enterprises, delivered a loss after tax for the 2020/21 financial year of £639,000.

The report stated the total revenue generated of £59.9m was under budget by £4.8m.

Officers said its education services had NYES faced unique challenges throughout the year, and that the pandemic had an adverse impact on the school catering business due to school closures.

While First North Law’s trading in the first half of the year resulted in a £14k underperformance, officers said NYnet experienced some challenging trading conditions throughout 2020-21, particularly with regard to new customer sales.

The report states Yorwaste performed well during the last quarter despite trading continuing to be difficult and  the business services Veritau group exceeded its budgeted profit for the year.

Cllr Les said: “The pandemic has had an impact across not only the council, but the council-owned companies and we are looking at the business plan for the future post-pandemic.”

He said he was optimistic about the firms staging a recovery this year, providing Covid variants did not have a major impact on the county.

Cllr Dadd, who is also the council’s finance executive member, said he was very proud of what the authority had achieved with its commercialisation agenda.

He said: “It’s been done in a cautious manner, but nonetheless has provided and post-pandemic will provide vital resources to the county council’s budget on behalf of the tax-payer.

“We are not risking millions and millions like other authorities, which are buying shopping centres. We are taking a cautious, level-headed, reasonable approach to this and any extra funds goes into support services, especially for vulnerable people, and that’s why we’re keen to pursue it,

He added the authority had a better chance of getting a variety of work done than many if not all other councils because it was the firms’ shareholders, so they had to perform for the authority.

Cllr Dadd said: “Their focus is entirely on service delivery to make profit or reach what the residents of North Yorkshire expect. It’s had a positive effect on service delivery.”