Future of council’s housing company in question after total loss of £1.7m

“Officers are intending to bring a [further] report to July cabinet to provide an update around proposals for future activity,” it said.

In March 2024, Swindon’s audit team said the company was at a “tipping point” in terms of its commercial viability. 

At the time, auditors said SHC had carried out “no active development of projects on site for the last 19 months”, with its last completions being six houses in 2020.

A report called for an urgent review of the company’s performance against its business plan and viability of its schemes, adding: “There is currently no exit strategy in the event of liquidating the company.”

However, in September 2024, the council authorised a £4m loan to its housing company to deliver 17 homes on the site of a former school, enabling it to convert Victorian buildings into seven flats and to build 10 new houses.

The flats and houses at the scheme, described in the most recent cabinet report as a “work in progress”, were intended to be sold on the open market to generate revenue for the council.

Almost half (£225,000) of SHC’s most recent losses came from finance costs related to interest on loans provided by the council.

A further £140,000 was down to a site being disposed of for less than its purchase cost, while £90,000 went on salary costs for the company’s project director and various administrative expenses.

A Swindon Borough Council spokesperson said: “SHC was established as an independent, private company in May 2017 as part of the council’s commercialisation agenda as a vehicle to deliver improved social benefits and revenue returns through the building and marketing of residential properties.”

The spokesperson maintained that the company “has delivered much detailed feasibility on potential future pipeline schemes, [but] wider economic pressures to borrowing costs and inflation to build costs mean a number of schemes are commercially unviable.

“Over the past 10 months, the council has been undertaking a review of its commercial activities and is working to bring a report to cabinet in July that will seek authority to reignite Swindon Housing Company, giving it more potential sites to develop to help deliver economies of scale and generate an operating profit,” they said.

“The council also remains committed to unlocking and supporting inclusive growth opportunities for private sector partners, such as SHC, which will bring homes, infrastructure and employment to Swindon. By delivering successful schemes, the company will show the opportunity Swindon has for others.”

Several councils have taken a similar decision to Swindon over the past 18 months. Most recently, Slough Borough Council revealed it was assessing options for a loss-making private housing company it owns, which has suffered from poor oversight and governance, and has no functioning board.