Council expects its trading arm to bounce back after tough year

A LOCAL authority that faced criticism after its trading arm sustained a loss of £639,000 is predicting the group of companies will bounce back into profit this year.

North Yorkshire County Council’s leadership has said while the overall profits of The Brierley Group remain lower than anticipated, the in-kind “shareholder value” of the companies to the public purse in the year to April, through savings, would be almost £6m.

A meeting of the shareholder committee of the council, which has embraced a “culture of commercialism” to help protect frontline services, heard The Brierley Group was forecast to turn the £639,000 loss of the previous financial year into a £268,000 profit for the 12 months to April.

Officers told the meeting the three months to September last year had seen “lots of ups and downs”, so across the group after tax there had been a loss of £330,000 for the quarter, against a budgeted loss of £1,000.

They said the main reasons for the loss was the impact of Covid-19 and struggles to retain staff. Officers said while its educational services firm had been hit by unpredictable uptake of school meals, making it impossible to achieve the necessary economies of scale, the firm was looking at innovative ways of working “to build on that commercial success as we move into a post-Covid world”.

The meeting heard roadworks company NY Highways, which launched in June last year, was set to generate a small profit, and its property services firm Align profits were expected to exceed budget and be ahead of pre-Covid trading, while internet service firm NYNet had also seen a strong performance.

However, councillors were told as its property developer firm Brierley Homes had three sites under construction at Pateley Bridge, Millwright Park and Marton cum Grafton, the group’s overall figures were being skewed by the length of time it would take to generate profits.

The meeting heard there had been challenges over getting labour and materials, which had hit the schedules, but the sites would start generating profits in the coming year.

Officers said Brierley Homes were creating a business plan which would ensure a steady stream of sites and houses into the future to ensure it was regularly profitable.

Coun Don Mackenzie, executive member for access, said: “This is certainly a more encouraging report than we had a year ago and even though the outlook for the year is less profit than we hoped for it is, nevertheless, a step in the right direction.”

Councillors heard the £5.9m of “shareholder value” was equivalent to just short of a two per cent increase in the authority’s council tax demand alongside improvements in services.

The meeting was told complaints over road maintenance had dropped since the launch of NY Highways.

The council’s deputy leader, Councillor Gareth Dadd, said local authorities up and down the country were looking at The Brierley Group “with envy”.

He said: “We are at the cutting edge of local government when it comes to matters like this and I think it is something that we should celebrate more. So those doom-mongers who are forever criticising the performance of the group perhaps ought to take that into consideration.”

Brierley Group is forecast to turn a £639,000 loss into a £268,000 profit. A report for a meeting of the shareholder committee of North Yorkshire County Council.