MPs and Greens call on council to open up over £6m new homes loss
- Credit: Copyright: Archant 2018
The city’s MPs and Green Party have urged the council to be more transparent after it lost almost £6m on a property development.
Extracts of a confidential council report, published by this newspaper on Saturday, revealed a company owned by Norwich City Council, called Norwich Regeneration Ltd (NRL), had made a £5.7m loss building new homes at Rayne Park in Three Score, Bowthorpe.
The report also criticised the contract the council had signed with builder RG Carter for the first 150 homes on the 80-acre site. That contract has since been renegotiated and the council defended its record.
Councillors were told about the scale of the problems in November last year, but the information was classed as commercially confidential by the Labour-run authority. The extent of the losses had not been public before, although in January councillors raised concerns about NRL failing to carry out an audit.
The opposition Green Party has now called for an independent investigation.
Green Party leader Martin Schmierer accused the council of trying to run a property development company with “little or no expertise” about the industry.
He also raised concerns about “blatant” conflicts of interest as Labour councillors on NRL’s board are also on the council cabinet which decides if money should be loaned to NRL.
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The councillors involved did declare their interest at council meetings.
But Mr Schmierer said: “The company was not properly scrutinised and had no independent oversight.”
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He also attacked the council for keeping meetings about NRL private.
Green Party councillor Paul Neale added: “There needs to be an independent review into the running of the company so we can be sure that the council achieves its aim of building high quality housing without jeopardising public money.”
Labour’s Norwich South MP, Clive Lewis, said the council had been forced to find new ways to raise money because of Conservative cuts.
But he added: “I completely understand why this kind of story upsets and angers people.”
He called on the council to avoid a “retreat to secrecy”.
“Very few difficult situations are improved by circling the wagons even further,” he said.
Mr Lewis added: “Developments like Rayne Park are long-term propositions so it’s genuinely too soon to make a call on the final impact of all of this on council finances. And none of this is any reason at all for the council to shy away from supporting development that contributes to the fight against climate breakdown. That’s what the people of Norwich have voted for.”
Conservative Norwich North MP, Chloe Smith, said: “It’s really important to be accountable, especially on big decisions.
“We do want more local homes and exciting regeneration, but we expect the council to act wisely with taxpayers’ money.”
The council said previously it had an excellent track record building new homes and had set up NRL to find new sources of income in the face of government cuts.