Taylor Talks-Romford Councillor David Taylor Looks At Mercury Land Holdings, A Private Property Developer Owned By Havering Council.

Councillor David Taylor, Ward Councillor for St Edwards in Romford, today writes his regular column in the Havering Daily.

Havering Council, like many other councils across the UK, owns a private property developer. The developer, Mercury Land Holdings (MLH), is owned 100% by the council and its director is the Chief Executive of the council. 

This arrangement has recently been described as a risk by the Chartered Institute of Public Finance Accountants (CIPFA), who were asked to report to the government on the financial situation in Havering. 

The report from CIPFA went even further, it said that the business plan for MLH does not reflect the priorities of the council and that it should be reviewed. 

 MLH has long been a mystery to me, on many levels. I have the immense privilege of chairing the committee which oversees housing in Havering. But when I asked for MLH to provide me with a list of contractors that they used I was refused. In a public meeting, council officers told me that MLH is a private company and so doesn’t have to tell me who their contractors are. Even though the private company is owned 100% by Havering Council or, as I’d put it, you.

The way that MLH is funded is also odd to me. 

MLH doesn’t have a lot of cash, so it takes loans from Havering. Havering borrows from the government, adds interest to the loan, and then loans it to MLH. This means that when MLH buys a car park from the council, like Como St, it borrows money from the council in order to give it back to the council, who borrowed it from the government. 

I hope you’re following!

Why does Havering do this? Well, because the repayments from MLH give us about £1m a year in profit and that goes straight into our day to day spending pot. So, in effect, it nibbles away at our £88m black hole, keeping it from being £89m. 

Look, I’m not going to claim to be an accountant, maybe this is a genius move. But when I’m not even allowed to know where MLH is spending the taxpayer cash then I get a little bit curious. 

 But wait, there’s more. 

MLH is not set up to deliver social homes, it builds homes for private rent, as any other developer does. This means that your taxes are being used to build private homes, to fund a company which won’t break even until 2030, in order to produce a tiny £1m for the council. 

This is all happening whilst we have an £8m cost for housing people in temporary accommodation. Local residents, who can’t afford private rents and are waiting for years on our housing waiting list, are being placed into temporary accommodation all across the borough. Some are even going to be asked to move to Basildon, because we don’t have enough properties here. 

Let’s recap. 

MLH is owned 100% by Havering. The Director of MLH is Havering’s Chief Executive. MLH is funded by borrowing from Havering. But MLH doesn’t build the homes Havering needs to get our residents into permanent homes. 

Can you see why I am concerned? 

 Because MLH is a private developer, and has to repay these loans to the council, it has to make a profit on what it builds. This means that sites like Como St car park become cramped developments of tower-blocks and plans to restore the River Rom and make it beautiful and green again are cut back on. 

So not the homes we need, and cutbacks on improving the environment. 

 I’m not a NIMBY; I think we need homes in Havering. Parents tell me that they don’t expect their kids to ever leave home, or that the kids have to move out. That means that, little by little, our community is disappearing.

We can do better in Havering, and we can make this work for us. 

 Yes, MLH was set up by my Conservative colleagues when they ran the Town Halls. Lots of councils did this. But things were different then. We didn’t have hundreds of families in temporary accommodation, and we didn’t have an £88m black hole. 

Now is the time, as CIPFA say, to review MLH and how it works. 

My proposal is very simple; taxpayer’s money should be building social homes and not private homes. 

If MLH was brought fully in-house, none of this keeping it at arm’s length, then things would be simpler and more transparent. It wouldn’t have to pay extra interest on the loan, and it wouldn’t have to pay the council £millions for car parks, so the cost of building would be much lower. 

In addition to lower costs, MLH wouldn’t have to make a profit, so they could build houses instead of flats. Which is exactly what we need in Havering. 

We’d miss out on that £1m, sure, but we spend £8m on temporary accommodation and we could make a dent in that. 

 MLH is told what to do by our Cabinet. They review the business plan every year and it mostly gets a quick nod of approval. It even comes to my committee, but we are not allowed to look into its books and have no power to force change. 

This is why I am asking the council to review the MLH business plan. 

Taxpayer money must work for the taxpayer. It must be used to build what we need, and it must be spent transparently. 

At the next council meeting, I am tabling a motion calling for this change, backed by my Conservative colleagues. 

My plan will reduce the cost of construction, allow the building of houses, get local families into homes faster, slash our temporary accommodation costs, and create more transparency. 

I’m sure that will be popular with Councillors on all sides of the political aisle, right?

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