Picture not quite so rosy for South Kesteven Districy Council’s property company

The council’s Companies Committee on Tuesday was given an update on Gravitas Housing’s Wherry’s Lane build which according to leaked documents last October was expecting a £132,000 loss – leading to it being called a “shambles”.

Although updated profit/loss figures were not given to the meeting, Richard Wyles, Assistant Director of Finance at SKDC, told councillors in a verbal update that the financial gains included £498,000 developers contributions into affordable housing, £171,000 in loan repayments, £107,000 in charges for council staff time and New Homes Bonus grants of £188,000.

Councillors renewed calls for a full review into the project to take place once it was complete before a final decision was made whether to move on to new projects, or to scrap the company entirely.

“That impacts on the overall bottom line of the development. Taking a rounded view the council can see some real financial benefits of the development over and above the fact that 25 families will be living in the heart of the town using all the local facilities,” said Mr Wyles.

He said 21 of the 25 homes on the site had been sold or were due to be sold including 19 apartments and two townhouses.

He said interest “remains very strong” and that all the properties had seen interest, however, some offers had not been viable for the company to consider.

He added that the business case when the project was started had shown sub-5% returns and narrow profit margins, adding that the aim was to “stimulate growth in that area of Bourne where the private sector would not trade”.

Councillors admitted the report was “optimistic” but were still sceptical on the success of the site.

Councillor Philip Knowles said: “I’m sure everyone will be pleased but the fact remains that all those issues of where revenue is coming from were all expected in the budget and the expected profit from the sale of the things will not be achieved and of course, there will be a losson properties that were built on property that we own, and we didn’t have to pay for in the first place.

“So the rosy picture isn’t quite so rosy.”

Councillor Ashley Baxter said he had been to “nearly all” the meetings about Gravitas.

“It was never predicted that we would lose any money on it. Full stop. Even though it was a marginal scheme the first presentation said it will make so much money and as they went on, we realised that we weren’t going to make so much money. It is a shame that that it is where it is.”