This Land Ltd - losing £1 million on every house sold in 2024-25?

Cambridgeshire County Council needs to come clean with taxpayers over failed housing company

By Andrew Rowson

Last December, at a meeting of the full Cambridgeshire County Council (CCC), a member of the public (Mr Guy Lachlan), asked Cllr Lucy Nethsingha about the performance of This Land Ltd, the authority’s wholly owned housing development company.  This was the council leader's reply:

“The company has enabled the building of nearly 1,000 homes, including 300 affordable homes, with plans to deliver over 4,700 more, of which around 1,700 will be affordable.  In continually assessing the value of the company, we hold regular meetings to discuss progress and performance, as well as to ensure the company is following its business plan and provide security for our loans.”

It was a highly inaccurate and misleading statement in several ways, not least in the use of the phrase “enabled the building of...”.  What the councillor meant, but did not say, is that to address This Land’s chronic lack of cash and its hopelessly over-simplified business plans, the company has sold off to developers at least £78 million worth of its own mortgaged land purchased from CCC for the express purpose of building houses on it and selling them for profit.  It was those developers, who sometimes picked up the properties for much less than they were worth, who are responsible for the 1,000 homes statistic, if even that is an accurate figure.  In all but one instance, This Land kept all the onward sale proceeds, failing to repay the County Council the mortgage principal.  That apparent breach of legal mortgage agreements between This Land and CCC largely explains why the company’s debt (before the recent debt write-offs) is £119.8m, whilst its shareholder's land security in March this year was only £24.4m.  

As for This Land itself, in the eight accounting periods to March 2024, audited accounts filed at Companies House show that it sold just 76 homes, at average prices ranging between £247,000 and £561,000 per unit per year.

The public cannot see how many houses This Land alone has built or plans to build in the future.  That information is not shown in the latest business plan published in July. It might be held in one of the confidential appendices only some county councillors have been allowed to see.  In addition, for the fourth consecutive year, CCC has denied a member of the public’s request to inspect This Land’s draft accounts during the statutory document inspection period – in breach of the law.

This Land’s 2024/25 audited accounts are unlikely to be published before the end of the year, which is only three months before the end of the 2025-26 accounting period.  In the meantime, some details about its 2024-25 performance have emerged in This Land’s accounts consolidation schedules – figures This Land produced for the County Council to construct its own consolidated group accounts.

The table above shows This Land's 2024-25 house sales in sharp decline over the last two years.  The £5.693m revenue figure for 2024-25 in fact covers house and land sales, but the consolidation schedules do not show the split.  However, the indications are that This Land may have run out of surplus land to sell to keep itself afloat.  So most, if not all that figure is likely to be house sales.  Although This Land is supposed to be a housebuilding company, historically less than a quarter of its sales revenue has come from selling houses.  In the four years to 2023-24, 76%  came from cannibalising its own mortgaged property portfolio to avoid running out of cash altogether.

If one assumes all of This Land's 2024-25 sales revenue came from selling houses, that would represent a 42% fall in house sales on the previous year.  So how many houses did This Land manage to sell in 2024-25?  The number of units is not included in the consolidation schedules, though it should be stated in the draft accounts.  If one takes the same average sale price per unit as the year before, (£427,400) that would be just 13 houses sold in This Land’s ninth year of activity.  If the average sale price in 2024-25 were higher than that, or some of the revenue related to land sales, the number of units sold would be correspondingly lower, and the loss per sale higher.  13 house sales would mean a comprehensive loss of £1.05 million for each house This Land sold in 2024-25 (£13.633m / 13) - at a time when it had to be ramping up construction and sales by at least an order of magnitude to stand any chance of meeting its loan repayment promises.  Without the £65.7m write-off, This Land will need to repay its lender, CCC £120 million of loan principal, plus at least £35 million of loan interest in the next five years - with all of those repayments having to come from house sale profits.

In March this year,  CCC wrote-off £59.85m of those loans, plus 100% of its £5.85m equity "investment" in This Land, and called the company a going-concern as a result.  At the same time, Cllr Nethsingha insisted it was not a write-off and bizarrely, that all the loans and interest will be repaid, apparently by 2030, with no new funding needed.  The new Chair of the council's Shareholder Sub-Committee, Cllr Karen Young, echoed that upbeat message in a written answer at July's full council meeting: 

"This Land themselves will continue accounting for the full repayment of the amounts lent by the Council."

Putting aside the write-off contradictions above, full repayment seems impossible given the ingredients This Land now has to work with.  At 31st March this year, the company had £11m of cash in the bank and inventory worth £46.7m, of which £24.4m was land.  To repay all loans and interest, This Land would need to convert those assets into profits of £160 million - £32m/year on average, including 2025-26.  With even an exceptionally optimistic net profit margin of 20%, (compared to the minus 183% margin in 2024-25), that means This Land's total house sales would need to be £960 million over five years, or £192m per year on average until 2030.  If one also takes a highly optimistic average unit sale price of £450,000 - (given This Land's commitment to 45% affordable houses), it means This Land would need to build and sell on average 427 houses each year until 2030:  2,135 houses in total.  Looking at the actual numbers and the direction of travel of This Land's house sales over the last three years (33, 23, 13 units), it is clear that the latest business plan, like its predecessors, is another work of fiction, apparently intended to deceive the public. 

In January this year, on local auditor KPMG's recommendation, CCC's councillors serving on the Shareholder Sub-Committee were given governance training, specifically to equip them to challenge This Land's business plans.  This was in response to KPMG's findings from its 2023-24 audit of CCC's single entity and group accounts:

"Based on our findings we have determined that there is a significant weakness in relation to arrangements for economy, efficiency and effectiveness due to the lack of expertise required to oversee and challenge commercial subsidiaries, particularly This Land."

Yet in July this year, in secret session, the Sub-Committee voted unanimously to approve This Land's revised business plan (which does recognise the huge write-off), but whose arithmetic does not begin to add up, as explained in a previous blog post.

Déjà vu

An elected member from CCC's last administration recently admitted in writing that even four years ago, This Land's assets were between £50m and £90m lower than its liabilities, and that the leadership decided it could not wind up the company immediately because that would mean CCC inheriting the debt, which would bankrupt the council.  Four years ago, This Land's official comprehensive losses were just below £20 million.  So what did CCC do?  It put its collective head in the sand, hoping that somehow things would get better.  Predictably, they got worse.  Now This Land's comprehensive losses are £63.9 million, and the authority is again ploughing on as before, losing over £1 million every month, and over £1 million per house sold.

This Land's revised business plan is a thoroughly dishonest document.  Its cashflow model at paragraph 3.5 provides no useful information.  It simply shows net flows per year, without revealing the corresponding outflows and inflows, or how many houses are due to be built and sold each year.  It does not show the expected profit margin from those sales, or explain how the company can suddenly produce healthy positive profit margins at scale, after years of profoundly negative margins.  It does not explain where This Land will obtain the cash to build the houses that are to produce the model's implausible positive net cashflows.  Nor does it explain how This Land will fit over 2,000 houses onto the remaining land from its portfolio that it has not yet sold to developers, without buying more land with more money loaned by CCC five years after the government outlawed councils borrowing from the Public Works Loan Board to fund commercial activity.

Finally, CCC has chosen to conceal six appendices to This Land's latest business plan that might shed some light on the headline figures.  It declares it is not in the public interest for the public to see that information.

Nowhere has This Land or CCC explained why This Land's house sales have shrunk by 61% in two years, or why average house prices have fluctuated so wildly from year to year.  The public has been kept totally in the dark, and we are expected to put our trust in figures that, as currently presented, make no sense at all, and also to put nearly £200 million of our money in the hands of elected members who the auditor thinks lack the expertise or the curiosity to ensure taxpayers' money is well managed.  Here is another quote from KPMG's latest year-end report to the Audit & Accounts Committee in February this year:

"We reviewed the corporate risk register and noted that there was not a specific risk associated with This Land. Given the potential risk to the Council of This Land falling further behind the business plan, we would expect there to be a risk on the Corporate Risk Register to ensure there is appropriate understanding and oversight over the risk as it may emerge."

Produce the information, or close down This Land now.

In light of This Land's rapid decline in commercial performance, the arithmetic impossibility of the latest business plan working, and the recent £65.7m write-off that was kept secret for nearly four months until after the local elections, the public is entitled to much more and better information.  In 2021 CCC chose not to close the company down for fear of bankrupting the council, when This Land's losses were less than a third of what they are now.  So there is every reason to suspect the same irrational motive for inaction persists today at CCC.  Doing nothing and hoping for the best does not reduce the risk of bankrupting the council, it magnifies it.

Local taxpayers need to see the hidden, so-called commercially sensitive appendices to the latest business plan and This Land's draft accounts for 2024-25 which should provide them with essential facts they have every right to see.  Besides, a company that has been forgiven £60m worth of debt and gifted a two-year loan interest holiday worth a further £15 million so it can carry on losing a million pounds of public money each month is clearly not operating in the same commercially competitive environment as other local housebuilders.  They would have gone bust and left the marketplace years ago had they performed as poorly.  The "commercial sensitivity" argument for CCC concealing embarrassing information therefore expired years ago.  The County Council needs to come clean and produce all the hidden facts and figures without delay, or else close the company down now in the taxpayers' interest, whatever the wider ramifications might be.  

Is this evidence of a £34 million fraud against the taxpayer?

By Andrew Rowson

Council created bogus mortgages to cover up housing company insolvency.

Since its inception in 2016, Cambridgeshire County Council’s (CCC) wholly-owned housing development company, This Land Ltd (TLL) has been loaned £133 million of taxpayers’ money by its shareholder.  To afford the loans, CCC borrowed from the Public Works Loan Board (PWLB).

In the nine years since then, TLL has recorded comprehensive losses every year totalling £63.9 million up to March 2025 (2024/25 figures are subject to audit).

Over the years, TLL has repaid £13.3m of loan principal.  Those repayments were all for unsecured loans, which normally attract a higher interest rate for the borrower because of the higher financial risk for the lender.  The table below shows all loans, which reconcile with This Land Ltd’s closing borrowing balances in its financial statements (excluding the March 2025 debt write-offs - see below).

Where did the remaining loans go?

Apart from the start-up funding from the £13.34m unsecured loans (apparently repaid with cash from later loans), the £119.7m loans outstanding at 31 March 2025 were supposed to be mortgage loans, secured on former CCC-owned properties (greenfield and brownfield sites) that the council sold to This Land at market rates.  In his report on This Land’s latest business plan in July 2025, CCC Executive Director of Finance and Resources, Mr Michael Hudson writes of This Land paying the authority “£78.8m in capital receipts” for those properties.  That leaves unexplained lending of £40.9 million.  Where did that money go?

The answer lies mostly in the legal charges against This Land’s properties filed at Companies House under This Land Development Ltd.   The first 30 charges relate to purchased land assets.  Charge No. 0031 created in May 2023 is a catch-all charge on all This Land’s assets, including cash, plant and machinery etc. presumably to minimise CCC’s losses in the event of This Land’s insolvency.

The first 30 charges are tabulated below.  Their total value is £113.8m, £5.9m short of the £119.7m total loans figure, but still £35m more than the stated capital receipts figure of £78.8m.  In the absence of any other information, it could be assumed that the £5.9m represents additional money used by This Land to keep the company running, rather than for purchasing properties.  If so, on top of the £13.34m repaid loans, it would bring This Land’s start-up funding to £19.24m.

On closer examination of the legal mortgage documents, charges 0001 to 0027 (total value £77.872m) represent individual properties or packets of properties representing This Land’s portfolio of mortgaged land.  In every instance the charge value is identical to the corresponding property’s sale price to This Land in 2018 and 2019, as recorded at the Land Registry.  In other words, they are all 100% mortgages.

Charge 0030 is the only disclosed property This Land purchased from someone other than CCC.  It is a property in Hertfordshire bought from a private individual for £1.75m in March 2021.  Therefore, it does not feature among the capital receipts TLL paid to CCC.

The £77.872m represented by charges 0001 to 0027 is within £1m of Mr Hudson’s £78.8m capital receipts figure.  The difference may be down to an undisclosed additional mortaged property, a misstatement by Mr Hudson, or some other reason.  But it does not explain the remaining £34.2m difference between the total borrowing and the total charges, which seems to lie within charges 0028 and 0029 – highlighted in blue above.

Before exploring those two charges, a look at a representative charge in the 0001 to 0027 range proves instructive.

Charge reference 0010 created on 13^th April 2018 was for TLL’s purchase from CCC of the Fitzwilliam Road Hostel in Cambridge: 

TLL paid £1.1 million for the hostel, and that money came out of a larger loan facility agreement, known as “Portfolio 3” of £38.291m (see below).

The stated loan facility total is in fact slightly higher (by £1.445m) than the corresponding loan of £36.846m CCC took out from the PWLB in January 2018 (shown in yellow in the borrowing schedule table above).  Perhaps the authority added £1.445m from available funds to make up the Portfolio 3 total.

No second mortgage allowed

An important clause in every charge/mortgage document is clause 6.3 – No Security:

It means that both parties agree that the charge is the only charge on each property, and there can be no second charge against it.  That is standard practice, especially since they are 100% mortgages.  If a second charge were to be made against the same property, in the event of the borrower defaulting, the second lender would have no security over the property because of the initial charge, and the second loan would thus effectively be an unsecured loan, and possibly unlawful if it had been presented as anything else.

Charges 0028 and 0029 – double and triple counting of the same land security

Charge 0028 was created in August 2020, shortly before This Land reported devastating results in its 2019 audited financial statements.  In the calendar year to December 2019, This Land sold no houses.  Its token sales revenue was £34,407 rental income.  Its comprehensive loss for the year was £11.8m.  At the year-end it had only £3.78m in the bank, and owed CCC £5.18m in loan interest arrears that had been payable in 2019.  To compound matters, in the course of 2019 This Land borrowed a further £50m from its sole shareholder, bringing its total indebtedness to CCC at December 2019 to £96.5m.  The interest payable over the next 15-month accounting period would be in the region of £8.9 million.

At the beginning of 2020, This Land’s development pipeline also looked bleak.  During the 15-month accounting period to March 2021, TLL would sell just two houses (its first two) for £1.2m (i.e. less than a quarter of the 2019 loan interest arrears).  The company was critically short of cash.  In the background, the Treasury had published a consultation paper in March 2020 on future lending terms for councils borrowing from the PWLB.  The writing was on the wall that the unchecked cycle of CCC being able to borrow from the PWLB to lend to TLL, only to borrow more to lend to TLL so it could pay the loan interest, would soon come to an end.

Charge 0028 is different to the preceding charges.  Unlike them, the charge relates to a long list of properties, most of which apparently are set out in an “instrument” that is not accessible to the public.  However, the two named properties in the brief description below are familiar because they are properties on which CCC already had 100% charges.  The former Pru at 8 Station Road, Foxton, together with the Methodist Church at 6 Station Road is charge No. 0011 (see above), and the Fitzwilliam Road Hostel is charge No. 0010 (see above).

Charge 0028 states above that in respect of this £18.6 million mortgage (which matches the £18.6m loan dated August 2020 and highlighted in orange in the borrowing schedule table above):

“Under this deed, the Borrower [This Land Development Ltd] provides security to the Lender for the £18,600,000 made available or to be available under Facility Agreement.”

But that is impossible.  This Land cannot provide security to the same lender a second time for the same named properties in Foxton and Cambridge.  That is double counting, and possibly fraudulent.

What other properties are secured against the £18.6m mortgage?  Since the public cannot access the “instrument”, the next best thing is to scroll down the Charge 0028 page on Companies House to look for additional transactions filed against the charge.  There are seven of them, all charge release documents, with dates ranging from February 2024 to January 2025.  All the pdf documents can be downloaded and inspected.

The earliest charge release document, on 5^th February 2024, is a release of the Fitzwilliam Road Hostel charge, which is the same property, with the same Land Registry title number (CB346566) as Charge No. 0010 shown above:

An examination of all the charge release documents under Charge 0028 confirms that in every instance, the properties connected to that charge are already properties subject to one of the earlier 100% charges in the range 0001 to 0027.  Those other charges, and their release dates under Charge 0028 are shown in the Charge 28 column highlighted in blue in the charge table shown above.  From that table one can see that Charge 0010 was also released in the documents on its own Companies House page, on the same date (5^th February 2024).  That release document omits a description of the asset, but the charge code ending 0010 identifies it as the Fitzwilliam Road Hostel.

Strangely, on the charge 0010 page on Companies House, the hostel was also released in full from the charge at the earlier date of 18^th April 2023.  The property itself was sold by This Land on 24^th February 2023, as recorded at the Land Registry.  So the second charge release, a year after the property was sold, is redundant at the very least, and impossible since after the first release the property no longer belonged to This Land.

As the charge table above shows, Charge 0029 follows the same pattern as Charge 0028.  It too covers multiple filings contained in an inaccessible “instrument”.  It also has the same brief description as charge 0028:

As with charge 0028, charge 0029 also has additional transactions filed against it - eight in this case.  They too all refer to properties already held by This Land, secured by previous charges that cannot be added to.  Five properties have three 100% charges against them: 0028, 0029 and the original charge reference.  Others, like 0018 and 0024 have been released from charge 0028 and or 0029, but those charge releases have not been recorded under the original charges 0018 and 0024 themselves.

Finally, in two instances (charges 0002 and 0022), the mortgaged properties have been sold to third parties, and the sales recorded on the Land Registry, but the charges have not been released in either of the charge documents on Companies House.

A word about Charge 0029

The Charge 0029 document dated 2^nd December 2020 puts the value of that facility agreement at £15.6 million.  Yet the corresponding loan closest to that date in This Land Finance Ltd’s audited accounts is for £9.279m, with a repayment date of November 2026 (see first light blue highlighted row in the borrowing schedule table above).  So, presumably the start date was in November or December 2020.  

In July 2024, CCC’s Strategy, Resources and Performance Committee agreed in secret to lend This Land a further £5.9m and add £400,000 to the council's equity investment in TLL.  According to subsequent public documents from the Strategy, Resources and Performance Committee in October 2024, the additional loan was to come from a previously unused drawdown facility on the "last loan" (i.e. the Nov/Dec 2020 loan of £9.279m).  Later the equity investment was dropped, but the £5.9m loan went ahead.  It would have brought the loans against that agreement up to £15.179m – just £400,000 shy of the original facility agreement’s stated total of £15.6m.  The £5.9m facility amendment agreement, dated 30^th August 2024, can be viewed here.  The document refers not to the 2020 agreement, but to an amendment of an original loan facility agreement dated 11^th May 2023.  That is odd because there is no reference to a 2023 loan facility agreement on Companies House or in This Land’s or This Land Finance’s or This Land Development’s audited accounts.  This Land’s outstanding loans to CCC remained at the same £113.8m level for four years, right up to the additional £5.9m loan agreed in July 2024.

There is no reference in the amendment document to any land security as collateral for the risk to the lender of This Land defaulting on its loan obligations.  Also, the agreed interest rate of 7.1% is implausibly low for a short-term, unsecured loan to a company with no creditworthiness, no record of making profits, historical losses of over £50 million, and £113.8m of outstanding debt.  CCC's current and previous local auditors have both commented that there is a significant risk of some or all of that debt not being recoverable.  As one former county councillor implied as far back as October 2020, no rational lender would lend to This Land with its track record.  Nor should CCC have done.

Finally, following the government’s November 2020 ban on councils borrowing from the PWLB “primarily for financial return”, and the amendments to the Prudential Code in December 2021, it would appear that this unsecured loan, in addition to being reckless on CCC’s part, may also have been unlawful.

What does it all mean?

The main finding after examining This Land Development Ltd’s charges on Companies House is that in 2020, CCC and This Land twice knowingly entered into substantial commercial loan agreements that they knew to be highly irregular, if not fraudulent, and that put taxpayers' money at great risk.  At the time, it was anticipated that the government would shortly prohibit councils from borrowing from the PWLB for commercial yield.  CCC and This Land both knew that the latter's cashflow position and short to medium term commercial prospects were dire.  Others might have concluded that that was the moment to admit defeat and wind the company up.  In March 2021, This Land's official total losses were only £20 million.  Now they are £64 million.  In 2020, CCC chose instead to pump more taxpayers' money into the company, just before the government ban came into effect, in the forlorn hope that the extra cash might keep the company afloat long enough to allow it to make pie-in-the-sky mega profits at some future date.  Charges 0028 and 0029 were not loans secured on This Land’s assets that were free from other charges.  They were bogus mortgages that provided zero security to CCC or its taxpayers, and came with an extremely high risk of never being recovered.  That risk manifested itself in March this year, when Mr Hudson secretly wrote off £59.85m of This Land's debt, and all of the authority's £5.85 equity "investment".  The need for those write-offs can be traced back to 2020 and former CFO Chris Malyon's dishonest decision to prop up the zombie company with significant state aid masquerading as commercial loans secured on land assets unencumbered by other charges. 

Why did they do it?

In This Land’s 15-month financial period to March 2021, the company received cash from three sources:

•  £1.2 million from the sale of its first two houses,
• Two loans from CCC totalling £27.879 million (£18.6m + £9.279m)
• Proceeds of £18.211m from the sale of mortaged land to third parties, without TLL repaying the loan principal to CCC.

At 31^st March 2021, This Land had a cash balance of £18.33m, up from £3.78m in December 2019 (see 2020/21 accounts, p29).  Had it not been for the two bogus, unsecured loans, This Land’s bank account would have been £9.01m overdrawn.  Without the irregular loans and the proceeds from the mortgaged land disposals that year, the company’s bank account would have been £27.2m overdrawn.  It would appear that both parties have been covering up This Land’s true commercial position for nearly five years.  Every year since then, This Land has continued to dispose of mortgaged land (over £78m in total), and keeping all the proceeds, with the express written consent of CCC's CFOs, including the current Executive Director of Finance and Resources, Mr Hudson. 

The motives for this course of action seem to be two-fold:

1)      CCC officers and elected members would be prepared to do almost anything to avert and avoid reputational damage.  Pretending This Land is still a going concern is a way to kick difficult decisions into the long grass.  The same mentality exists in 2025 following CCC’s £59.85m (50%) write-off of This Land’s irrecoverable loan debt, and the council leader's insistence that it is not a write-off but a “debt rescheduling”.

2)      Even by 2020, CCC Finance had become accustomed to, and dependent on receiving substantial and growing net revenue from This Land with loan interest income at around 7.35% less loan interest payable to the PWLB at around 2%.  The net income (up to £6.2m/year), was built into CCC’s investment income budgets.  Were it to falter or fail, CCC Finance would need to compensate with savings elsewhere or make cuts to frontline services, as it now has had to do.  The finance department, and perhaps the wider council therefore had another perverse incentive not to address This Land’s declining performance and hopeless financial position, which had its origins in former CFO Chris Malyon's 2016 plan to set up a housing development company principally to bring in net loan interest revenue to the authority.  The original ten page prospectus, approved unanimously by members at the time, with no detailed business case and no public consultation, can be found here.

Who knew about it?

The list of people who were complicit, must have known, or should have known about the bogus unsecured loans in 2020 and in the five years since then, is long.  The names of This Land's senior officers can be found on Companies House.  The names below include those working for CCC with special responsibilities for governance of This Land.

 

A)      This Land Non-Executive Directors appointed by CCC

Quentin Baker: - NED - Jun 2016- Jun 2018 (CCC Monitoring Officer)

Chris Malyon: – NED – Jun 2016 – Jul 2020 (CCC CFO)

Stephen Cox: - NED - Nov 2019 – Apr 2023 (CCC Exec Director: Place & Economy)

Cllr Josh Schumann: - NED - Jul 2020 – Jul 2021

Frank Jordan: - NED – Apr 2023-  (CCC Exec Director of Place and Sustainability)

Cllr Neil Gough: - NED – Jul 2021 – May 2025

 

B)      CCC officers

Gillian Beasley: – CEO – Sep 2015 - May 2021

Stephen Moir: - CEO – May 2021 –

Chris Malyon: - CFO – Nov 2013 – Mar 2021

Tom Kelly: - CFO – Apr 2021 – Mar 2023

Michael Hudson: - Exec Director of Finance & Resources: - Mar 2023 –

Quentin Baker: - Monitoring Officer - 2009 - May 2018

Fiona McMillan: - Monitoring Officer – May 2018 – Nov 2022

Emma Duncan: - Monitoring Officer – Mar 2023 –

Mr Baker has been included above because he drew up the legal mortgage documents that allowed This Land to dispose of mortgaged properties without repaying the mortgage principal.  Mr Malyon and Mr Baker had conflicts of interest because they represented both the borrower and lender in relations between CCC and TLL.

C)     CCC elected members

Cllr Steve Count: - Council Leader and Chair of General Purposes Committee – 2014 – May 2021

Cllr Lucy Nethsingha: - Council Leader and Chair of Strategy & Resources Committee – May 2021 –

Cllr Mark Goldsack: - Chair of Commercial & Investment Committee – May 2020 – May 2021

Cllr Ros Hathorn: - Chair of Assets & Procurement Committee – Jul 2023 – May 2025

Cllr Karen Young: - Chair of Assets & Procurement Committee – May 2025 -

Cllr Mike Shellens: - Chair of Audit & Accounts Committee – 2018 – May 2021

Cllr Graham Wilson: - Chair of Audit & Accounts Committee – Dec 2020 – May 2025

Cllr Chris Boden: - Chair of Audit & Accounts Committee - May 2025 –

Where will This Land Ltd's business plan cash come from?

 By Andrew Rowson

At the July meeting of Cambridgeshire County Council’s Shareholder Sub-Committee, the latest, long-awaited business plan of the authority’s wholly-owned housing development company This Land Ltd (TLL) was revealed and approved by members.  An earlier business plan shown to councillors in January in private session was rejected.

Not all the latest plan has been revealed to the public however.  The latest business plan available to the public does not show key details such as the number of projected house sales year by year, sales revenue or the annual costs of building those houses.  Instead it just shows annual cashflows. 

The table below is the simplified cashflow model available to the public.

The bottom two sections are easy enough to understand, but the site cashflows section at the top is lacking in detail, and problematic.  Over time, operating cashflows approximate to gross profit (sales less cost of sales).  The site cashflows therefore indicate that over the six financial years to March 2030, TLL aims to make gross profits of around £88 million that will be used to pay off the 59.9m loan balance as at March 2025, though not the £59.95m that was effectively written off in March this year (see the “Conversion to Capital” reference above).  Without that write-off, TLL's outstanding debt at 31 March 2025 would have been £119.75m

In the real world, those annual site cashflows do not occur simultaneously. The expenditure involved in buying building materials and paying for the outsourced labour to build the houses must precede the cash revenues from selling the houses - often by many months.  This Land’s historical record over the last five years shows it has achieved a total gross margin of just below zero per cent.

Given that track record, it would be unrealistic to expect TLL, in its tenth year of trading suddenly to leap to a healthy gross profit margin of 30% say, especially when it has pledged to build and sell 45% of  houses as affordable homes, which have lower margins.  In light of TLL’s minus 23% gross margin in 2024/25, it is a stretch to suggest even a 10% gross margin going forward, and no evidence is available to the public to suggest it is capabe of achieving even that. 

Nevertheless, with a gross profit margin of 10% in 2025/26 (year 2 from the business plan table at the top), in order to achieve positive site cashflows of £12.6m, This Land would need to spend around ten times that sum (£126m) some time before it could collect the sales proceeds of eleven times that sum (£138.6m) - resulting in the 10% gross margin of £12.6m.  Where will it find that cash?  According to figures from This Land's consolidation accounts schedule, It had £10.9m in the bank in March 2025, and inventory with a book value of £46.7m. 

Even if it depleted all of that in 2025/26, it would still be £68.4m short of the cash it would need to achieve those 2025/26 sales.  It cannot deplete all the cash and inventory anyway because it needs to replenish both for future years.  As with all of This Land’s previous business plans, the arithmetic just does not add up.  If its gross profit margin in 2025/26 were lower, at just 5%, it would need £252m of cash to make £264.6m worth of sales to produce the same projected £12.6m positive cashflows – an even more far-fetched scenario, and impossible without significant additional funding from Cambridgeshire taxpayers.  TLL claims it will require no more funding from the council until 2030.  It has made the same claim several times before.

Moving to year 4 in Table 2 above (FY28), at a 10% gross profit margin TLL would need cash resources of £454m to achieve site cashflows of £45.4m, or £908.6m cash up front to achieve the same site cashflows with a 5% gross profit margin.  Again, where will that money come from? 

Being economical with the truth - Cambridgeshire County Council style

By Andrew Rowson

Cambridgeshire County Council (CCC) is desperate to conceal the scale of losses made by its wholly owned housing development company, This Land Ltd (TLL).  In addition to the £50 million official losses accumulated in eight years of trading up to March 2024, the council has had to face up to the likelihood of not recovering all or any of the £120 million it has loaned to its subsidiary.  In previous years TLL always claimed it was on track to repay all the loans and interest payments on time.  

But, due to This Land's declining performance, CCC's auditor KPMG says there is a "significant risk" CCC will be unable to recover the full value of the loans as they fall due between 2026 and 2029.  It has told the council to produce an Expected Loss Provision (ECL) in its latest accounts (to March 2025) to disclose what fraction of the outstanding debt it considers unrecoverable.

In March this year, in a secret meeting, the council's Executive Director of Finance decided the fraction of unrecoverable debt should be 50%, or £59.85 million.  That taxpayers' money has now been written off and is an expense in CCC's 2024/25 draft accounts.  In addition, because This Land's liabilities are at least £44m greater than its assets, the council's £5.85m investment in This Land's shares is now worthless and it too has been written off.  The total crystallised loss comes to £65.7 million.  In the Narrative Report section of CCC's draft accounts for the 2024/25 financial year, the Executive Director of Finance and Resources, Mr Michael Hudson, described this action as the council exercising "strong and sound judgement". 

The Council however insists it is not a write-off.  Instead it is calling it a loan restructuring, and a "conversion" of half the outstanding loan into a £59.85m "capital grant" with no interest to pay.  KPMG has promised to investigate these unconventional arrangements during this year's audit.  In its audit plan in June, KPMG wrote: 

"...given that the restructuring of the debt can have significant and complex accounting and legal implications, we expect there to be a significant risk."

One accounting and possibly legal implication might relate to the claimed capital nature of the "grant".  The original loans from CCC were to enable This Land to purchase surplus land and buildings from CCC's extensive property portfolio and develop them at a profit.  Instead, since 2020, This Land has disposed of the lion's share of its property (at least £78m worth), mostly at a loss, to eager developers who have presumably gone on to make profits.  The sale proceeds from those disposals were not used to pay off the mortgage loans, but were retained by TLL, partly to pay its own staff (up to £235,000/year  for the CEO) and to pay CCC the £8.56m annual loan interest charge.

Thus, at the 2023/24 balance sheet date (31 March 2024), This Land's own audited accounts show that the land security against its outstanding borrowings of £113.85m was just £25.4m.  The remaining security had been thrown away - all with CCC's express written consent - when it allowed TLL to sell off the mortgaged land.  Which officer gave that consent to throw away that taxpayers' money?  Since March 2023 it has been the current Executive Director of Finance and Resources himelf, with the minuted approval in committee of elected members on the Council charged with governance of This Land, and also charged with looking after our money.

It follows that at least 58% of what CCC is calling a "capital grant", is not backed by capital at all, but is simply a write-off of unsecured debt.  An unsecured debt write-off cannot be converted into a capital grant whose cost is amortised over the useful life of non-existent underlying assets.

At the end of June 2025, CCC's Shareholder Sub-Committee was presented with a report showing cashflows in and out of the council relating to This Land.  The cash inflows are shown as being marginally higher than the outflows.

According to CCC, that means  no taxpayer's money has been lost.  But the chart omits significant cash outflows and fails to mention the write-offs which are relevant flows, representing taxpayers' money.

The key to the chart above shows loan interest TLL has already paid to CCC (£42.6m) and future interest it may pay (£21m).  But it does not show the interest CCC is having to pay the Public Works Loan Board on the loans the council itself took out to lend on to This Land in first place.  At around 2.08% interest, that adds up to around £27.5 million up to March 2030.  It is evidently a relevant cost in measuring This Land's performance.

When the shareholding and £59.85m loan write-offs are added, the left-hand side of the chart is now £89 million higher than the right.

CCC is keen to mention the £42.6 loan interest TLL has paid it up to 2023/24.  When the corresponding loan interest to the PWLB is taken into account, the net loan interest revenue falls to below £30m, which is less than half the cost to the taxpayer of the recent write-offs that CCC conveniently omits from the narrative it is peddling, though it insists that This Land is a going concern. 

Which mortgage lender in the real world would allow its borrowers to sell £78 million worth of mortgaged property without repaying the mortgage principal, and then bail them out to the tune of a further £60 million?