Council shouldn’t be blamed for trying, but it’s been taken for a costly ride at Rayne Park
PUBLISHED: 08:50 24 May 2020 | UPDATED: 08:50 24 May 2020
OPINION: Our local councils are between a rock and hard place.
With funding from Westminster cut, and demand on services increasing, they have been scratching around for other ways to raise money.
One way Norwich City Council thought it would do this is by becoming a property developer, building hundreds of homes at Rayne Park in Bowthorpe.
But unfortunately, as we reported on Saturday, it has been badly burnt by its foray into the housing market.
It is expected to lose £6m on the first 150 homes in the scheme, leaving taxpayers to foot a large bill.
The council seems to have thought it could become a successful developer, with little industry experience and oversight, by setting up a company called Norwich Regeneration Ltd.
Instead, it has been drawn into costly contracts and left with homes not worth the amount they cost to build.
The council should not be criticised for trying to bring more affordable, energy efficient homes to the city. They are needed.
Nor should it be criticised for trying to find new revenue.
But the way it has gone about it suggests a dangerous mix of arrogance and naivety.
It kept the scale of those losses private and they have only emerged into the public domain thanks to reporting by this newspaper.
It has been shown time and again that, away from scrutiny, mistakes are more likely to happen.
Losses have piled up and it now finds itself having to use more of its reserves to save its property development company.
It is only at the start of this scheme so it is not too late for it to learn from its mistakes.
We will be watching closely to make sure it does.