What conflict of interest?

 By Andrew Rowson

What sequence of events led to Cambridgeshire County Council's (CCC) housing development company, This Land Ltd (TLL) being allowed to dispose of land and properties it had only purchased from its shareholder two years earlier?

Since April 2020, TLL has disposed of £88 million worth of its own mortgaged property, selling it to developers without repaying the mortage principal to CCC.  In so doing, most of CCC's land security has now been lost.  That loss of security was the single biggest factor in CCC's decision a year ago, (apparently at auditor KPMG's insistance), to write off £59.85 million of unrecoverable loan debt owed by TLL, and to make a 100% impairment (i.e. write-off) of CCC's now worthless £5.85m  equity investment in This Land.

The County Council not only allowed This Land to throw away the authority's only chance of making a long-term return on its investment, it recommended it.  In April 2020, Members on the Commercial and Investment Committee agreed, by a majority, to a recommendation in a report by a senior Finance Officer to permit TLL to dispose of a number of mortgaged properties and keep the proceeds, rather than to repay the mortgage principal.  Both Officers and Members have a duty to be good stewards of taxpayers' money.  Allowing a supposedly arms-length subsidiary to throw away the Council's land security does not look like good stewardship.  This is the story of how that pivotal decision was made.

The background.

By September 2019, TLL had been in existence for three years, but had yet to sell a single house.  On 13th September 2019, CCC's Deputy s151 Officer presented an update report on This Land Financing to Members of the Commercial and Investment Committee.

The report pointed to the over £100m that This Land had already borrowed, and signalled that CCC would now need to lend substantially more to the company as it entered the development and construction phase.  No concrete figure was given, and the Committee was only asked to note and comment on the report rather than approve a specific recommendation.  

Three days later, TLL's accounts for the year to December 2018 were signed off by its auditor, RSM UK Audit LLP.  The company had made a comprensive loss of £3.9 million, which raised the company's total losses over its first two years by a factor of six.  A week later, on 24th September 2019, TLL held its AGM, and the Commercial and Investment Committee held a brief confidential meeting beforehand.  The agenda papers and minutes for that meeting have not been made public.  However, the action log for the Committee shows that at that September meeting, Committee Chairman, Cllr Joshua Schumann, was tasked with seeking legal advice on who should be allowed to serve on TLL's Board of Directors.  In particular, Committee Members were apparently unclear and needed a qualified lawyer to tell them whether it was appropriate for CCC's Chief Finance Officer and s151 Officer, Chris Malyon, to serve on This Land's Board, or whether that might be considered a conflict of interests.  Mr Malyon was the architect behind the This Land project, and in charge of the Finance and Resources Directorate, where the commercial loan interest from TLL ended up, before it was forwarded (according to Mr Malyon) to frontline services in a manner that has never been made public, and which no elected Member apparently has ever asked to see.  Up to March 2026, £45 million of interest from This Land has been paid into CCC's Finance and Resources Directorate.

The Action Log record shows that it then took a further nine months for the legal advice to arrive.  

When the C&I Committee met on 19th June 2020, Mr Malyon explained what the lawyers had said (see also here, timestamp 33:05):

"...the other key issue is around the non-exec director role, which Steve Cox and I both act as shareholder representatives on the Board, and Members of the Committee will know that the advice that we’ve received on two occasions now from external legal support has been quite candid.  In my statutory role as Section 151 Officer to the Council, there is a risk that I would be conflicted in sitting on the Board.  And, although we’ve taken steps to mitigate that in terms of the activities of this Committee by me stepping down from any issues associated with the loan structures and sale of any properties to This Land, it does put Tom Kelly, who is my Deputy Section 151 Officer obviously in a difficult position because he reports to me, and I sit on the Board of the Company.  So, we’ve always had in mind that… and have agreed that I would step down and a political representative would then be appointed by the Committee."

Companies House filings show that Mr Malyon resigned from his This Land NED role three weeks later, on 9th July 2020.

Why did it take so long?  Why was the first legal advice insufficient?  And when was that provided?  Did anything consequential take place during that nine month period?

Information about the relevant dates and which legal advisors were used is currently the subject of an FOI request.  Seven months into that nine month period marked perhaps the most critical decision about TLL's future.

Firstly, the Deputy s151 Officer's 13th September 2019 report set out that CCC Finance was contemplating lending substantially more money to This Land.  Some of the additional loans were expressly to allow the company to service its existing loan debt.  It was an admission that it could not pay its own loan interest.  What rational lender responds by lending a borrower even more money?  That only creates a spiral of dependency.

Then, on 11th March 2020, six months after Committee Members had requested the legal advice, and with still no response, HM Treasury published a consultation paper setting out the government's plans for the Public Works Loan Board to stop lending to councils for commercial yield - exactly the type of borrowing CCC had been doing to finance This Land.  The document spelled out the risks at the local level if councils borrow irresponsiby for the wrong reasons:  

"At the local level, it exposes ratepayers to the risk that the income does not materialise, leaving the local authority with an inflexible commitment to keep up with the repayments on their loans."

That warning might have been addressed to Mr Malyon.

The following month, on 24th April, CCC's Commercial & Investment Committee discussed a report in private session on an Agenda item called:  

This Land: Multi-year Business Plan, Financing & Other updates.

There is little doubt the Treasury's paper would have been discussed.  All the public could glean at the time from the public minutess of the meeting is that Members approved, by a majority to:

"receive the updated This Land Business Plan 2020 as well as to agree the other related recommendations as set out in the report."

It took a further two years, and a brief reference in another committee report for the public to understand what had been agreed in April 2020.

Paragraph 3.4. of the This Land Monitoring Update Report presented to Members of the Strategy & Resources Committee on 29th March 2022 begins:  

"In April 2020, the Commercial and Investment Committee gave permission, for the Council’s part, for This Land to sell certain listed properties releasing and varying the Council’s mortgages/legal charge and other rights and interests in those properties. At that time the listed properties focused on those identified for disposal in that phase of the business plan."

Would they have been listed for disposal so soon after This Land purchased them had it not been for that clear signal from the Treasury?  So, instead of closing down TLL in April 2020, when total losses were only £16.5 million, when additional borrowing from the PWLB  looked impossible, and when CCC could still have repossessed all the property it had sold to the company, one Committee decided in secret to let This Land begin selling its mortaged properties to developers, not to repay CCC the mortgage principal on those properties, but instead use some of the proceeds to continue paying £8.5m/year in loan interest into CCC's Finance Directorate.  As a direct result of that decision, and the land disposals that have followed every year since, This Land's losses are now £75.8m, CCC's land security is down to £20.6m, it has already had to write-off £66m of unrecoverable debt, and the figures today suggest the company will struggle to find the cash among the ruins to repay much, if any of the remaining £59.9m loan principal it still owes its shareholder.

The April 2020 report setting out the rationale for that recommendation today remains a confidential document.  It is the subject of an FOI request.  But on past experience, and despite the clear public interest in its disclosure, it may need to be escalated to the Information Commissioner's Officer before it can be made public.

Who authored the report, and does it matter?

The report's author would either be Mr Malyon himself, or more likely his then Deputy, and successor as s151 Officer, Tom Kelly.  Whoever it was, at the time Mr Malyon was still the s151 Officer, and remained a Non-Executive Director of This Land Ltd thanks to the delay in obtaining the legal advice.  If the report was written by his Deputy, how likely is it that he was not influenced by Mr Malyon, to whom he reported directly?

It is impossible to view that report and subsequent decision in terms of an arms-length commercial relationship beween CCC and TLL.  Releasing and varying the Council’s mortgages/legal charge and other rights and interests in those properties resulted in a massive cash injection for TLL and a corresponding loss for CCC, and by extension for local taxpayers.  £66 million of that loss was crystallised in March 2025.  However senior Officers and the Council Leader try to conceal its true nature, last year's loan write-off will never be recovered.

That far-reaching decision six years ago was not debated or approved by the full Council.  It raises other important questions such as - Was the decision properly informed?  Were Members aware that This Land was already in financial difficulty?  Was the decision consistent with CCC's statutory duties and financial/governance obligations?  Whoever's name was on the report, and regardless of whether the s151 Officer left the room before the matter was debated, he could not have been unaware of what was being proposed, or what was decided.  The conflict of interests seems as plain as day.

Two months after that decision, and nine months after it was sought, the legal advice arrived, and Mr Malyon resigned from his position at This Land Ltd shortly thereafter (see above).

The FOI request for the April 2020 report and associated documents, including the confidential minutes, can be found here.  Readers of this blog will be updated with any developments relating to the request.

 

How could This Land Ltd gets its figures so wrong?

By Andrew Rowson

Today, Companies House published the final audited accounts for 2025-26 of This Land Ltd, Cambridgeshire County Council's (CCC) wholly-owned housebuilding company.  The company made a comprehensive loss of £11.9m for the year, on revenue of £5.7m.  It brings This Land's total losses over ten years of operation to £75.8 million, as reported on this site last week.

Last October, in a Business Plan Monitoring Update report to elected Members serving on CCC's Shareholder Sub-Committee, the company projected revenue for the financial year of £21.3 million, with debt repayments of £8.66 million to its shareholder.

In two more Monitoring Update reports for the Committee in February and July this year, projected revenue and loan repayments declined to £12.65m and £1.9m respectively.  But even last month's report overstated This Land's actual, now audited revenue for the year by £6.915m (121%).  It is hard to understand how this could have been an innocent mistake or oversight when the latest report was published nearly four months after the end of the financial year in question.  How could This Land not know in July 2026 how much land and how many houses it had sold in the twelve months to 31st March 2026?  The three iterations of the annual projected revenue together with the actual revenue from the audited accounts are shown below.

This Land's history, from the start in 2016, is one of hopelessly optimistic projections based on little or no reliable evidence, and little or no effective governance by elected Members.  When things go wrong, CCC's automatic response seems to be to spend money on consultants to direct accountability elsewhere.  In 2021, when This Land's cumulative losses reached £20 million, CCC engaged consultancy firm Avison Young to produce a 93 page "Shareholder Review of This Land" that CCC's auditors have pointed to ever since as evidence that the Authority takes its governance role seriously.  Between November 2021 and February 2023, CCC paid Avison Young £312,127 for its services.  

Since February 2024, CCC has engaged audit firm Grant Thornton to review This Land's short term cashflow reports.  One Grant Thornton report, which was not made available to the public, can be found here.  Between February and November 2025, CCC paid Grant Thornton £231,456 for that work, including a single payment of £162,000 last November:

In the February 2026 meeting of the Shareholder Sub-Committee, Members saw the latest update of This Land's Business Plan for the 2027 financial year.  How relevant that is now in light of the company's published 2025-26 accounts is another matter.  Nevertheless, on p15 of that business plan, This Land writes: 

"Grant Thornton will be undertaking a review of the business plan and the underlying operational and financial assumptions on behalf of the shareholder, in addition to their quarterly review of operational progress through the monitoring reports."

As at today's date, CCC has not published any payment datasets beyond April this year.  But it looks as though taxpayers will continue to foot the bill for services that appear to offer no value for money to the public, but exist only to enable the Council to claim it is taking governance seriously - as measured by the amount of money it is spending on consultants.  This, and no doubt other expenditure by CCC relating to This Land is part of the hidden cost of propping up a moribund housing development company that seems to be trading whilst insolvent, since its total liabilities currently exceed its total assets by £60.1 million (2025-26 accounts, p11). 

Why didn't CCC close down This Land Ltd in 2020?

By Andrew Rowson

In the last post on this site, I explained how Cambridgeshire County Council's (CCC) wholly owned housing development company, This Land Ltd (TLL), would need to make at least £28.6m of clear profits in each of the next three financial years if it is to repay CCC just half of the £120m loan capital it owed at the end of March 2025.  31st March 2029 was the date the authority's Executive Director of Finance and Resources, Michael Hudson set last year for finally winding up the loss-making company.

On 31st March 2025, TLL and CCC entered into a loan Amendment and Restatement Agreement, in which £59.85m of its outstanding debt to CCC would be written-off, whilst the remaining £59.9m would remain, though with higher loan interest rates (9.37%) - at least initially.  That remaining half of the debt is due to be fully repaid by March 2029.  To conceal its true nature, CCC's narrative for the £59.85m loan write-off was that it was not a write-off, but a "conversion to a non-interest bearing loan", or a "capital contribution", or "capital grant".  The idea is that it will still be repayable to CCC only inasfar as there are sufficient funds available in March 2029 after This Land has discharged all its other debts and liabilities of whatever nature (see agreement, p28).  It follows that for This Land even to begin repaying that £59.65m "capital contribution", This Land will need to make at least £86 million of profit over the next three financial years, after making £75.8m of losses over the previous ten years.  A close look at the figures makes that outcome wholly unlikely, which is why CCC formally acknowledged in its final 2024-25 accounts that it was not expecting any repayments from that component, and This Land's latest business plan does not include any repayments to CCC towards the £59.85m.

The last post looked at the projected loan repayments in This Land's latest business plan for meeting its  remaining £50.9m repayment obligations.  Every one of This Land's historical business plans has been discredited for being totally unrealistic and over-optimistic.  Like its predecessors, the latest business plan projects the bulk of the repayments to come near then end of the plan.  But there is no explanation, at least to the public, of how the company will generate the profits to make even those repayments possible.

Two more statistics reinforce the implausibility of This Land meeting even half of its debt repayment obligations.

In November 2020, the last government banned councils from borrowing from the Public Works Loan Board for "debt-for-commercial yield" activity - e.g. with a view to making commercial profits on enterprises and investments outside councils' core business of delivering public services.  In March 2020, HM Treasury announced its intentions in a publicly available consultation document.  The following month, in a confidential decision that the public cannot see, CCC's Commercial and Investment Committee resolved by a majority to allow This Land to begin selling off its mortgaged properties to developers and retain the proceeds rather than repaying its lender (CCC) the loan principal (which is what happens in the real world). Conservative Members voted for the recommendations, Lib Dem and Labour Members voted against.  The only reason the public knows about that decision is because it was referred to in a report to the Strategy & Resources Committee two years later in March 2022 (see here, Agenda Item 6, paragraph 3.4), when Members resolved unanimously to allow This Land to dispose of more mortgaged properties without repaying the mortgage principal to CCC.

In both instances, in 2020 and 2022, the decisions were made because This Land needed the additional cash to stay afloat and to pay CCC the commercial interest it demanded (up to £8.5m/year).  That income, around £45 million between 2018 and March 2026, was paid into CCC's Finance & Resources Directorate supposedly to contribute towards CCC's frontline services.  But no public reconciliation exists to show how and where that cash was spent after it arrived at CCC.  Officers and Committee Members point to that income as an example of how This Land benefits CCC.  But if that £45m income comes at the cost of a £66m bad debt write-off, with additional future losses likely,  it is not a net benefit at all.  And that net loss is before one considers the loan repayments CCC has to make to the Public Works Loan Board (PWLB) on the loans it took out in order to lend on to This Land for its purchases of Council-owned land.  Even at 2%/year interest, 11 years' worth of interest payments to PWLB will cost the Council around £26.4m.  If those PWLB loans were taken out for longer than 11 years (typically 25-40 years), the relevant cost to CCC and its taxpayers may continue for decades into the future.

The most visible effect of This Land disposing of those mortgaged properties is that the authority's land security against This Land defaulting on its loan repayments has been steadily eroded by the decisions recommended by CCC's current and former Chief Finance Officers (Michael Hudson, Tom Kelly, and Chris Malyon), and approved by two committees chaired by former Councillor Josh Schumann in April 2020, and by Cllr Lucy Nethsingha in March 2022.

By March 2025, £83.5 million of CCC's land security had gone, which fully explains why the Council had to write off £59.85m of unrecoverable debt in March 2025, plus £5.8m of its worthless equity investment in This Land.  The remaining £20.6m in the chart above is what remains of CCC's land security a year later, in March 2026.  That represents the remaining asset base on which TLL has to generate the unlikely profits over the next three years if Cambridgeshire taxpayers are to avoid having to pay yet more for the Council's failure to oversee and demonstrate good governance over This Land Ltd.

The erosion of CCC's land security is measured in This Land's disposals of mortgaged land since 2020-21 without repaying CCC the loan principal.  Three CCC CFOs (representing the lender) recommended the disposals, which were approved by the elected Members of the two committees mentioned above.

Up to £89m of taxpayers' money has been deliberately thrown away with those property disposals.  The 2025-26 figure (£5.73m) is This Land's total revenue in 2025-26 according to the consolidation schedules it sent to CCC.  The split between house and land sales in 2025-26 is not yet available because CCC has denied interested parties their statutory rights to inspect This Land-specific documents, which are related to CCC's group accounts.  So the precise land disposals figure for 2025-26 might be slightly lower than £5.7m.  It is fifth successive year CCC has broken the law to prevent the public from inspecting and having copies of those important documents.

In the last two financial years, This Land's revenue from the sale of houses and land has dropped precipitously to £5.69m and £5.73m respectively.  In 2024-25, the company sold just one house for £460k.  It is not yet known whether This Land sold any houses in 2025-26.  However, with This Land's interim CEO Mr Rob Williams publicly acknowledging in February this year that "we are not a housebuilder", it is likely that most of the company's 2025-26 revenue came from land disposals.

The fall in house and land sales in the last two years means that comprehensive losses in both years (in red) were more than twice as large as the company's disclosed revenue.  It is suggestive of This Land's pipeline of houses and land to sell drying up, or being tied up with procedural delays.  Historically, This Land's houses have sold for substantially less than their construction costs alone.  The table below shows that selling land is not something This Land can turn a profit on either, even before deducting the other overheads such as administrative expenses and loan interest payable.  These statistics make the prospect of This Land suddenly turning the corner and making super-massive profits between now and March 2029 even more improbable.  And yet no elected Member serving on CCC's Shareholder Sub-Committee has raised any concerns or challenged the figures they are presented with - at least not in public.

Why wasn't This Land closed down in 2020?

This Land did not sell its first house until the 15-month accounting period to March 2021, nearly five years after the company was incorporated.  By then it was already mired in debt for which it could not afford the loan interest.  Before 2020, CCC's response to TLL's appeals for cash was to lend the company yet more, which only exacerbated the problem.  But with the government's well signposted decision to stop councils like CCC borrowing more from the PWLB for their commercial initiatives, that source of funding dried up overnight.  In March 2020, following the Treasury's consultation document, CCC was faced with a stark choice.  It already knew that TLL's wildly over-optimistic projections for massive profits from housebuilding were fantastical.  Either close down the operation immediately and cut its losses (TLL's total losses then were £16.5m - now they are £75.8m), or soldier on, putting its faith in an unlikely turnaround in fortunes and bigger rewards in the future that would more than compensate for the company's rocky start.  Where was the evidence to support that rosy prospect?  It certainly was not available to the public in 2020, or in any year since then.

In April 2020, CCC's Commercial & Investment Committee nonetheless resolved in confidential session to persist with the company, and thus to put more substantial sums of public money at risk. The decision to allow This Land efecively to cannibalise itself - to dispose of its own mortgaged land so it could keep up with the interest payments to CCC and spend the remaining proceeds on admin expenses, consultants etc. was clearly reckless, and resulted in precisely the outcome the Treasury had warned about in its consultation paper only a month earlier:

"The case for this ‘debt-for-yield’ activity can be compelling for the individual

local authority. But it introduces risks locally and nationally. At the local level,

it exposes ratepayers to the risk that the income does not materialise, leaving

the local authority with an inflexible commitment to keep up with the

repayments on their loans. Within the wider public sector, it diverts money

from core services such as schools, hospitals, and roads."

The fact that CCC made a conscious decision to throw away ratepayers' security seems to indicate two things:

1) This Land could not continue its operations without further cash injections once PWLB-financed lending via CCC would no longer be available, and 

2) CCC was more focused on the uninterrupted inflow of commercial loan interest receipts into its Finance & Resources Directorate than it was on supporting and monitoring This Land as a business.  No start-up business like a housing developer with a long lead-time before it can generate income and profits could have survived the onerous burden of repaying up £8.5m/year in loan interest to its lender. Besides, This Land did not have sufficient qualified staff to process and develop £87m worth of properties all at once, and convert them into new houses to sell to the public. It was a recipe for failure.

Later in 2020, CCC made available a further £34.2m for TLL in two loan facilities (here and here).  Presumably those loans were also financed by the authority borrowing first from the PWLB in time to beat the governent's ban in November that year.  Those loans, corresponding to charges 0028 and 0029 in This Land Development Ltd's charges register on Companies House, purport to be secured on properties.  But, the loan instruments show that all but one of the properties were already associated with earlier exclusive 100% mortgage charges recorded at Companies House.  It means that several of the same properties had been mortgaged three times over.  Effectively, those 2020 loans were unsecured, and possibly unlawful.

The additional unsecured loans further increased CCC's exposure to risk.  They were executed by CCC Finance Officers, once again with the full knowledge and approval of elected Members serving on the Commercial and Investment Committee, chaired at that time by Cllr Mark Goldsack.

Taking everything into account, it would appear that CCC as a whole is unwilling or unable to admit that the This Land project has failed, and content to make further losses so long as the loan interest revenue continues to flow into the Finance and Resources directorate, all the while maintaining that the company is a going concern.  This Land Ltd's latest consolidation schedules show that the company's total liabilities exceed its total assets by £58.1 million.  After ten years of commercial operation, that does not sound like a going concern.

An independent inspection of CCC's £45m loan interest income and where it went?

It should have been clear to CCC years ago, and certainly by March 2020, that the company could not succeed because it was too small to compete, that CCC lacked knowledge and experience of the housebuilding sector, and because serious miscalculations were made about cashflow and the start-up company's ability to service a nine-figure debt burden imposed upon it practically from day one.

In light of CCC's irrational decision in 2020 to put more taxpayers' millions at risk, it may be appropriate to suggest an external examination of what happened to the £45 million of loan interest income from This Land between 2018 and March 2026 that the former Chief Finance Offficer (and This Land's founding Director) Mr Chris Malyon engineered would be paid into the Council's Finance Directorate, which he ran.  If Officers are correct in stating that those funds were subsequently redirected to the Council's frontline services: adult care, potholes etc. there should be clear evidence of that in the form of electronic audit trails and account reconciliations to vouch for all the money coming in and exactly where it went from there.  A Council that places "accountability" as the first of its core values in its Constitution should have no objection to such an exercise, and it would be a comfort for local taxpayers to know that at least some of their money has not been totally misspent.

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. 

This Land Ltd CEO: “We are not a housebuilder”

 By Andrew Rowson

An astonishing admission last month from the CEO of Cambridgeshire County Council’s (CCC) wholly owned housebuilding company, This Land Ltd.

Rob Williams, the loss-making company’s fourth CEO in as many years was speaking to CCC’s Shareholder Sub-Committee on 17th February about This Land’s Business Strategic Review.  He told members:

“We are now clear on the right future direction for the business, which responds to the strengths of the business, but also recognises, you know, that the business is not a housebuilder.  Our strengths are around land, and how we develop, promote, create a place and bring forward land for residential delivery.  We are not a housebuilder.  We can do it, but on significant scale, we can’t compete.”

That is a far cry from the clear message ten years ago.  In May 2016, CCC’s CFO, Mr Chris Malyon, told members of the Commercial & Investment Committee that building houses on land from the council’s extensive property portfolio was the only way forward:

“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.

The vision is to transform CCC from being a seller of sites to being a developer of sites. CCC is therefore developing, and delivering, a series of principally residential development projects from its property portfolio across Cambridgeshire, planned over an initial 10-year timescale.”

It was clear from day one to any casual observer that This Land would fail as a housebuilding company.  You do not lumber a start-up business with £120m of loan debt with a 7.35% interest rate years before it can build and sell its first house.  The loan interest repayments alone came to an unaffordable £8.5m/year.  In its first nine years, the company sold just 77 houses and made a comprehensive loss of £63.9 million in the process – an average loss of £830,000 on each house sold.  Recent information from a Freedom of Information request shows that This Land’s construction costs alone over the same period came to £33.15m – 30% higher than the £25.5m revenue from selling the houses.

The ten years it took This Land and its sole shareholder to recognise the obvious resulted in CCC having to write off half of the total debt (£59.9m) owing by This Land.  That cost hit CCC’s budget and its reserves in 2024-25 and results in cuts to frontline services that could so easily have been avoided.  What took This Land so long to reach this epiphany?

-ooOoo-

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What is £1 million between friends? The Malta Road mystery.

By Andrew Rowson

On the Companies House website, This Land Development Ltd – one of the This Land group of companies, lists 31 charges (legal mortgages) which it claims are secured against properties purchased by This Land.  Charges with references 0001 to 0027 are all for specific properties purchased from Cambridgeshire County Council (CCC), This Land's sole shareholder.  Charge 0031 is against land in Hertfordshire that This Land bought from a third party in March 2021.

Charges 0028 and 0029 (highlighted in blue below), are both described as development charges, and are unsecured loans, though the two "legal mortgage" documents claim that the loans are secured against properties.  Those two loan facilities were given to This Land in 2020, shortly before the last government put a ban on councils borrowing from the Public Works Loan Board (PWLB) for commercial ventures - as CCC had been doing to fund its onward loans to This Land.  The stated purpose of the two 2020 loans is set out in section 4 of the two loan documents.  £23 million of the loans was earmarked to enable This Land to repay CCC some of the loan principal and crippling loan interest on the earlier loans that it could not afford without help because the company has never made a penny of profit, and had yet to sell its first house.  In other words, in 2020, CCC lent This Land over £40m more money so it might manage to pay its existing, unaffordable debt.  Even that assistance ultimately failed.  In some respects therefore, the 2020 loans were a Ponzi scheme.  The lender's conditions were not too onerous.  Section 4.2 in each loan document helpfully state: 

"The Lender is not obliged to monitor or verify how any amount advanced under the Agreement is used."

Charges 0001 - 0027 are all 100% mortgages secured against properties purchased from CCC, with money borrowed from CCC.  The total purchase value of those properties is £77.872m, as set out below.  CCC received capital receipts for those sales to This Land.

However, on several occasions, CCC has claimed that the  capital receipts total is £78.8m, £1 million more than the sum of charges 0001 - 0027.  For example, in his report on the latest This Land Business Plan on 24th July 2025, CCC's Executive Director of Finance and Resources, Mr Michael Hudson, informed members of the Shareholder Sub-Committee (paragraph 1.2):

"To date, This Land has paid the Council £78.8m in capital receipts and £42.6m in interest as revenue between 2017 and March 2024."

What explains the £1 million difference?  It might have been dismissed as a simple transcription error, or rounding error, until one looks at the loan documents behind charges 0028 and 0029 above that were obtained under a Freedom of Information request.  In Schedule 2, on pages 29 and 30 of each loan document is a list of the properties that supposedly provide the security for the "legal mortgages".

Each loan document shows the same ten properties, nine of which already have 100% morgages against them in earlier charges filed at Companies House.

This is problematic for several reasons:

1) The corresponding original charge documents for those nine properties (apart from the Malta Road Centre) all contain the same condition in paragraph 6.3 of their mortgage contracts:

No Security

"The charged property is free from any Security other than the Security created by this deed"  

 2) The earlier charges were all 100% mortgages.  Nine of them have now been mortgaged three times over, possibly for 300% of their value - which raises questions about the lawfulness and the enforceability of the charges in the event of default by This Land.  It also raises questions about the conduct of the officers at CCC and This Land who signed the two unsecured loans in 2020.  Both parties must have been aware that they were putting public money at risk, and possibly breaking the law.

3) There is no charge document for the Malta Road property filed at Companies House other than the two so-called development charges.

The first two points above warrant an in-depth treatment of their own, which may be the subject of a future blog post.  However, the £1 million value against the Malta Road Centre above appears to neatly explain the £1 million discrepancy between the total capital receipts acknowledged by CCC, and the £1m lower sum of the purchase prices of the properties in charges 0001 to 0027, as shown in the table above.

All This Land Development Ltd's charges are chronologically ordered, with no gaps in the numbering sequence.  So when was the Malta Road property purchased?  The Land Registry title reference leads to the Summary of Title document which can be downloaded from the Registry.  That document shows that the property was indeed purchased by This Land Development Ltd from CCC for £1 million on 30th August 2018.  If it had had a charge reference on Companies House, it would fit between 0020 and 0021.  Could its omission have been a simple oversight?  The other place that charges are registered is on the Land Registry's Summary of Title document.  All the other This Land title documents downloaded clearly show a charge between CCC and This Land Development Ltd.  Here for example is an extract from the Charges Register for 34a Station Road, March - Charge No. 0008:

But there is no such charge between CCC and This Land for the Malta Road Centre property - just two charges that pre-date This Land's purchase of the property in August 2018.

What does this mean?  It could mean that This Land has taken possession of a £1 million property free of charge.  CCC loaned This Land millions of pounds to buy the  surplus properties from CCC's extensive land portolio.  This land made the purchases, took possession of the properties and handed CCC the purchase price (the capital receipts).  The final component in the arrangement - the legal mortgage in 2018 between This Land and CCC - is missing for the Malta Road property, unless the two loans corresponding to charges 0028 and 0029 two years later can be said to be valid mortgage contracts, in spite of them doubling up and both stating that there can be no other charges against the same property.  And what is the significance of there being no reference to one or both charges in the Land Registry title document?

Several questions arise from this convoluted set of facts.  For example:

• Which party holds the title deeds to the Malta Road Centre - CCC or This Land?
• Should This Land's debt to CCC now be raised by £1 million plus the loan interest accrued over the last 7.2 years? (around £528,000 at the weighted average interest rate of 7.35%).
• Is it lawful for This Land to dispose of this property while its ownership is in doubt?
• How was it possible for CCC and This Land to overlook the Malta Road Centre's mortgage, and who was responsible?

These and other questions might be put to CCC's Shareholder Sub-Committee, which is charged with governance over This Land, on behalf of local taxpayers.

How is such incompetence possible?

 This Land Ltd loses £500,000 on a property purchased for £350,000

By Andrew Rowson

The story of 34a Station Road, March may shed some light on how Cambridgeshire County Council's wholly-owned housebuilding company has managed to lose £63.9 million in its first nine years of operation.  

In April 2018, This Land Ltd (TLL) purchased 34a Station Road, March as part of a £38.3 million portfolio of properties previously owned by Cambridgeshire County Council (CCC).  The substantial building is a former education centre, located on the same site as the March Community Centre (No. 34).  No. 34a was unused in 2018, with boarded up windows, and ripe for development in the centre of March.

As with all TLL's properties, it was purchased with a 100% mortgage loan from CCC.  The legal mortgage is filed at Companies House under This Land Development Ltd, with charge reference 0008.

Although the mortgage document is signed by both parties (CCC and TLL), the mortgage value, and hence the purchase price, is omitted.  It is not clear what effect that omission may have on the mortgage contract's validity.

To establish the purchase price one needs to obtain the historical title document from the Land Registry.  TLL paid CCC £350,000 for it on 13th April 2018.  

TLL did nothing with the property for sixteen months.  On 23rd August 2019 it submitted a planning application to Fenland District Council for a change of use to nine residential dwellings comprising one two-storey house, four 2-bed and four 1-bed flats.

Fenland District Council granted TLL planning permission on 4th February 2020, with the standard condition that development work had to begin within three years of the decision notice - i.e. by 4th February 2023.  This Land then had the option of developing the site itself, or selling it to a developer, with planning permission, which should have substantially enhanced its value.

The expectation was that This Land would develop the building, since that is what CCC set it up to do.  Here is an extract from the "Outline business case" put before CCC's Commercial and Investment Committee on 27th May 2016 for establishing a company "as a housing development vehicle (HDV) for property development":

"In view of CCC land holdings, and the currently extremely buoyant economic conditions for housing development, there is an opportunity for CCC to develop its own land rather than sell it. 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.

 The vision is to transform CCC from being a seller of sites to being a developer of sites. CCC is therefore developing, and delivering, a series of principally residential development projects from its property portfolio across Cambridgeshire, planned over an initial 10-year timescale."

For whatever reason, TLL did not develop 34a Station Road, but waited a further three years and nine months before selling it to Gas Tech Utilities Ltd on 27th November 2023 - without planning permission - for £251,000 + VAT.  The sale price was £99,000 (28%) less than TLL had paid for it five and a half years earlier.

Only This Land can explain why it squandered the opportunity of developing or selling the property within the three year planning permission window.  In so doing, it wasted time and the fees charged for the planning application.

The new owner, a director of March-based Gas Tech Utilities Ltd, submitted an all but identical planning application on 9th January 2024.  It was granted on 19th September 2024.  The new application used the same agent as TLL, and the 2024 application was for the same conversion to nine residential dwellings.  The Land Registry currently shows five of the nine new residences on its website: 1, 2, 5, 6 and 7 Grammar House, 34a Station Road, March.  No onward sales have yet been recorded.  That could be because the properties may have been let.  The purchaser is also a director of a property lettings company with the same March address as Gas Tech Utilities Ltd.

Why was the November 2023 sale price so much lower than the £350,000 TLL paid in April 2018?  One possibility is that it had been grossly over-valued by CCC's valuer Savills in 2018.  Another  is that property prices in March slumped over those five years.  That appears not to be the case, according to Nationwide's house price index calculator.  Property prices in March and East Anglia rose by 21% over that period, and by 27% between April 2018 and November 2022.  The sale price to Gas Tech Utilities Ltd in November 2024 was 41% below Nationwide's estimated market value.

A third possibility is that This Land, which has been chronically short of cash since incorporation, was squeezed by developers (who would have been aware of the company's cashflow crisis) into disposing of the property at much lower than market value.

So how much did This Land lose overall on this investment?  The relevant components are the purchase and sale prices, TLL's loan interest payable to CCC (around 7.1%), the planning application fees and associated costs, business rates, and the time value of money (cost of capital). 

If one estimates planning application costs of £60,000 in 2020 and applies a 3% cost of capital (close to the average house price increases over the same period), the discounted cash flows produce a net present value of minus £497,686 for the project in 2024 terms.

Future blog posts will feature other properties bought and sold by This Land Ltd.

I was wrong. This Land Ltd sold only one house in 2024-25

 By Andrew Rowson

Cambridgeshire County Council denies statutory information inspection rights to the public and its own elected councillors.

In the last post, I speculated that Cambridgeshire County Council's (CCC) beleaguered housebuilding subsidiary, This Land Ltd, may have made a comprehensive loss of over £1m on each of the thirteen houses it sold in 2024-25.  The calculation was based on the average sale price of  the 23 houses the company sold the previous year, and on the assumption that all, or nearly all the company's revenue that year had come from selling houses, rather than selling its own land, which historically has made up 76% of its total sales.  This Land Ltd has now published its audited financial statements for 2024-25, and the official figures are even more alarming.  This Land did not sell thirteen houses in 2024-25.  It sold just one: 61 Windmill Close, Over - for £463,543 on 24th May 2024. 

Apart from £57,000 rental income, the remaining £5.23 million sales revenue came from land sales, further depleting the company's property portfolio with which it plans to trade itself out of its current mess.  

This Land Ltd and its single shareholder, CCC, insist that the company will repay all its outstanding loans totalling £120m, plus interest (at least another £27m), by March 2029, which is now only three and a half years away.

All those repayments will have to come out of super massive profits, which the graph above shows is not This Land's forte.  In the latest accounting year, the company reported a loss of £13.63m.  Its net profit margin for the year was an impressive minus138%.  As reported in a previous post, to achieve that miraculous turnaround, This Land would need to build and sell hundreds of houses every year over the next four years, all at exceptionally high profit margins, on the small amount of land it has left after selling most of it to proper housebuilders.  The numbers clearly do not add up, and This Land's latest business plan is an arithmetic impossibility.

Riding roughshod over the law

In the circumstances, given the scale of This Land's losses and its outstanding debt, it is only reasonable for concerned members of the public and elected councillors who do not serve on the secretive Shareholder Sub-Committee to ask reasonable questions, challenge the figures we are allowed to see, and ask to see the supporting documents that might explain just how This Land plans to pull off the greatest turnaround in corporate history.  CCC is having none of it.

In July this year, I asked to inspect documents relating to This Land during the statutory 30 working days inspection period under section 26 of the Local Audit & Accountability Act 2014.  CCC's draft annual accounts include consolidated group accounts (pp144-155), which comprise CCC's and This Land's accounting records.  Section 26 states that during the inspection period, any interested person may: 

'inspect the accounting records for the financial year to which the audit relates, and all books, deeds, contracts, bills, vouchers, receipts and other documents relating to those records.'

That naturally includes This Land's draft accounts and all other accouting records, documents etc. relating to This Land's 2024-25 accounts, because they form an integral part of the county council's group accounts.  CCC though has a different interpretation of the law.  It asserts, without producing any evidence, that the group accounts and related documents are somehow out of scope of s26.  The senior legal officer and Monitoring Officer at the council, Ms Emma Duncan, claims to have received external legal advice to support that illogical interpretation, but has not produced any evidence of it.  I first asked Ms Duncan for that legal advice in July 2024.  She ignored the letter.  When I asked to see the evidence in July this year, the Chair of the Audit & Accounts Committee, Cllr Chris Boden, declared that it could not be produced because it might be subject to legal, professional privilege.  A Freedom of Information request was raised, which the authority should have responded to by 26th August.  Instead, it gave itself another four week extension period, citing dubious technical grounds.  The exemptions the authority claims to be relying on were challenged last month, but the authority has so far declined to address the substance of the challenge, resorting instead to its well used tactic of issuing a ludicrous threatening letter, signed on this occasion by the Monitoring Officer herself.

Elected members also denied their statutory inspection rights

As for CCC's elected councillors, many of them are just as concerned about This Land Ltd, and keen to have information that might explain exactly how the company plans to make super-massive profits in the next four years, when its house sales have all but evaporated, and without any further financing from CCC to repay all its debt and loan interest without taxpayers' money being lost.

If there is a plausible explanation, it must lie in six appendices that have been concealed from the public under Agenda Item 4 in the July 24th meeting of CCC's Shareholder Sub-Committee.

Any elected member at CCC, regardless of whether they serve on the sub-committee, is fully entitled under section 100F of the Local Government Act 1972 to inspect and have copies of any and all of those appendices.  Several councillors at CCC I understand have already asked to inspect them, but the Monitoring Officer has flatly refused their requests, apparently in breach of the statutory legislation.

Under section 5 of the Local Government and Housing Act 1989, the Monitoring Officer has a legal duty to ensure councils fulfil statutory obligations and apply their codes of conduct. This includes investigating and reporting on anything the authority does that has the potential to be an illegal action or any action that might count as maladministration.  So what happens when the Monitoring Officer herself repeatedly breaches statutory obligations that should allow the public and elected members to inspect important documents relating to a wholly owned housing company that has lost £63.9 million in 9 years, sold just 77 houses, owes its shareholder £126 million (including unpaid loan interest from 2024-25) that it can never hope to repay, and which pays its chief executive £575,065 in a single year?

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.