This Land Ltd's total losses grow to £75.8 million

By Andrew Rowson

Cambridgeshire County Council's (CCC) wholly owned housing development company - This Land Ltd - recently produced its tenth set of draft accounts, to mark its first decade in business. 

The company was set up in 2016 expressly for exploiting CCC's substantial land portfolio - to provide an ongoing revenue stream for the Council in support of its frontline public services.  As Chief Finance Officer Chris Malyon wrote at the time:

"Simply selling sites for others to develop, and profit from, is no longer an option for CCC. The scale of the financial challenges facing CCC requires that it has to review every opportunity available to it in order to create an on-going revenue stream that can mitigate the reduction in the services that it otherwise would have to make."

It is fair to say that things have not gone as planned.  Extracts from This Land's latest draft accounts, for the year to March 2026  make for grim reading.  A comprehensive loss for the year of £11.9 million on revenue of just £5.7 million brings the company's ten-year, cumulative losses to £75.8  million.

In March 2025, CCC acknowledged that it would not receive repayment in full for the £120 million in outstanding loans it had made to This Land.  Accordingly, the authority wrote-off practically half the debt (£59.85m), together with all of its equity investment in This Land, which had become worthless.  In spite of those performance figures, CCC still insists that This Land is a going concern.  Senior Officers and Councillors, including the Leader, Cllr Lucy Nethsingha, are determined not to call last year's adjustment a bad debt write-off.  Instead, they prefer to call it a "capital grant", a "capital contribution" or a "conversion to a non-interest bearing loan".  But with no interest for This Land to pay against that £59.85m, and with both CCC and This Land recognising that that the loan principal is not expected to be repaid, it is to all intents and purposes a debt write-off, or "impairment".  That adjustment has left This Land with outstanding loan capital of £59.9 million to pay back to CCC by March 2029, together with loan interest totalling at least £30 million (including arrears).  This is how the remaining loan capital repayments are projected over the four years to March 2029.

According to This Land's draft 2025-26 accounts, the £1.9m due for repayment in the financial year just completed was indeed repaid.  That only represents 3% of the total.  The bulk of the repayments are backloaded to the last two years - a familiar pattern seen in This Land's historical business plans, all of which were later discredited for being hopelessly optimistic and unrealistic.  So, once again, the public and County Councillors serving on the Shareholder Sub-Committee may have to wait another two years before discovering whether the latest business plan is any more plausible.

The significance of March 2029 is that that is the date set by CCC's Chief Finance Officer, Mr Michael Hudson at the beginning of 2025 for winding up This Land Ltd  altogether.  Confidential papers from January and February 2025 show that Mr Hudson recommended to Members of CCC's Shareholder Sub-Committee that they reject This Land's own commercial 10-year Business Plan presented in January 2025 on the grounds that it was too optimistic and risky.  Instead, Mr Hudson recommended imposing his own, alternative "Option B" Business Plan on This Land, which he described as a "managed wind-down of the company" by 2029 or 2030, with no new property developments or investments (see January document pack, pages 13-16).  Members duly approved that plan, which is essentially what informs the repayment chart above. 

Under the "Managed wind-down" Business Plan, This Land now has to generate income and future profits sufficient to meet its loan obligations and cover other overheads over the next three financial years beginning in April 2026 - including staff costs, non-executive directors, audit fees etc.  Those administrative expenses came to £2.7m in 2025-26 (down from £3.8m in 2024-25). So, over the next three years, those costs might reach a further £8 million.

In simple terms, to repay CCC the remaining £90m (loan capital + interest) over the next three years, This Land will need to generate profits totalling £98m, less the cash it held at 31st March this year (£12.1m).  So, around £86 million in total.  That means it will need to make average profits of around £28.6m/year for the next three years until March 2029, after making nothing but substantial losses for each of the last ten years.  It is a tall order, perhaps impossibly tall.

This is what that turnaround would need to look like if Cambridgeshire taxpayers are not to lose even more than the £66 million they lost in last year's unrecoverable debt write-offs:

With This Land committed to not building any more houses, and unable to borrow any more from its sole shareholder, it is not clear where those profits will now come from.  This Land's only meaningful asset other than cash is the land it still owns after selling off £83.5 million worth of mortgaged land to real property developers between 2020-21 and 2024-25, but without repaying any of the mortgage principal to CCC.  Those disposals were made with the express written consent of the lender (CCC) following a confidential decision taken by CCC's Commercial & Investment Committee in April 2020, shortly after HM Treasury announced it was planning to place a ban on councils borrowing from the Public Works Loan Board (PWLB) for "commercial yield".

According to This Land's latest draft accounts, as at 31st March this year, the company's remaining tangible land assets, representing CCC's much diminished land security, fell a further £3.8m to just £20.6m.  That is the asset base from which This Land now has to conjure up £86 million of profits over the next three years if it is not to cost Cambridgeshire taxpayers even more losses.