Report slams council housing firm over debt and failure to build

By Local Democracy Reporter Peter Davison

A new report has blasted a Wiltshire Council-owned housing company, saying it is £4 million in debt and has failed to build a single house in six years.

Wiltshire Council set up two “arm’s length” property companies in 2019. Stone Circle Development Company was created to build and acquire homes, while Stone Circle Housing Company rents homes to key workers, refugees, and those at risk of homelessness.

The interim report by Wiltshire Council’s Stone Circle task group criticised an ongoing lack of scrutiny, saying important meetings were held behind closed doors.

Presenting the report to the council’s Overview and Scrutiny Management Committee, task group chairman Cllr Gerry Murray said, “This report does not make comfortable reading for anyone.

“It concludes that after six years of operations, the Stone Circle Development Company has incurred just under £4 million of debt to the council taxpayer, and to date it has not delivered a single home, affordable or otherwise.

“It has two assets – a site in Calne forecasting a half-million-pound loss, and a site at Tisbury with planning permission obtained in 2023.”

“Much of the failure had been predicted by the financial planning scrutiny task group back in 2019. Their concerns are recorded in cabinet minutes,” said Cllr Murray.

“This was not a failure of scrutiny. It was a failure to listen to scrutiny.”

Two of the three original sites identified for development – Ashton St in Trowbridge and New Zealand Avenue in Salisbury – were not progressed. The latter site was later developed for social housing by another builder, and the five new properties are now part of the council’s housing stock.

The task group’s first investigation focused on the period from 2019 to 2024, when a business plan identified five development sites – four that would turn a profit, and one that would return a loss. Only the unprofitable site was developed. “Why this happened is not at all clear,” said Cllr Murray.

“The March 2024 shareholder meeting offered the shareholders three options, two of which were for the closure of the company, and one of which was to carry on.

“In the minutes of the meeting, there is no record of that business plan being discussed.

“We must answer the question why. Answering that question will be our primary objective moving forward.”

Council leader Ian Thorn said, “My overarching view is that councils step into commercial enterprises at their peril.

“What we lacked was hairy-assed housebuilders who understand how the market works, how you develop a site, how you get planning consent, and how you make money out of development.”

Conservative group deputy leader Dominic Muns was critical of the report.

“We’ve heard that the task group did not speak to all directors,” he said.

“The original chairman of the company has not been spoken to. The council’s previous CEO was not spoken to, which is bizarre.”

He said the impact of Covid and Ukraine was a “good reason why Stone Circle struggled with increased development costs.”

He said that “some unevidenced numbers” had “found their way in” to the report.

Cllr Murray fired back, “I’d like you to point out to me which numbers in the report are unevidenced.

“There is one key number in the report. The company has £3.9 million worth of debt. The second number in the report is zero – the number of houses it has currently delivered.”

The report will be considered by the council’s leadership, and the task group will continue its investigation, including interviews with key players.