North Yorkshire Council-owned Brierley Homes would have gone into administration, leaving the authority facing losses of more than £20m, without a £3.4m taxpayer-funded bailout, it has emerged.
A response from a senior Conservative councillor reveals the housebuilder would have become “financially unviable” without two council loans made in 2025.
After concerns were raised at a public meeting by former council chairman Cllr George Jabbour about the loans, made in July and September 2025, council leader Carl Les wrote that they were approved when the company was forecasting a £350,000 annual profit – before it emerged that it would instead make a £7.8m loss in 2025/26.
He told his colleague: “As the loans were for cashflowing purposes to allow the company sufficient headroom to achieve a more sustainable trading position, approval helped to reduce shareholder risk due to a lack of working capital in the company.
“It is worth noting that had the loans not been made available, then the company would not have been able to cover its outgoings and at that point would have been financially unviable.
“The consequences of that would have meant that the company would have gone into administration leaving the council with significant debt.”
In separate answers to questions from Reform councillor Tim Grogan, the authority confirmed that Brierley Homes has borrowed a total of £27.54m from the council.
The update comes amid criticism over a decision to extend the company’s loan facility by three years, from 2028 to 2031.
Opposition councillors have also questioned why the extension was approved several months ago but a public decision notice was only issued this week.
Cllr Grogan said the situation had left him “incandescent with rage”.
The former police officer added: “My background tells me that the people who are responsible for setting up and running Brierley Homes, who include members of this council, should be held accountable for those losses and for that business.
“And where I come from, anybody who has been responsible and accountable for a business that has lost this amount of money should resign.”
Green Party councillor Arnold Warneken also criticised the council’s handling of the company.
He said: “The council is lending taxpayers’ money.
“We need more transparency, not secrecy about big financial decisions.
“This is a multi-million-pound loan and we need to know how much is being lent and why it’s taken three months to tell the public.”
A five-year recovery plan has been drawn up for Brierley Homes following the appointment of a new managing director in February 2026.
The company is moving away from relying solely on private house sales towards a more diverse mix of developments, including pre-sold affordable housing and custom-build properties.
Councillor Peter Wilkinson, executive member for finance and resources at North Yorkshire Council, told the Local Democracy Reporting Service that the decision for the extension of the loan to 2031 was taken in May.
He added: “It’s been built into the five-year plan that has been approved by both the (Brierley Homes) board, which no councillors sit on, and the shareholder committee, on which councillors do sit.”
Following a request from Cllr Jabbour for greater transparency and accountability, the council agreed to hold an additional shareholder committee meeting in December to provide an update on the company’s finances.
Cllr Wilkinson added: “The shareholder committee is meeting again in December to review the outturn from the quarter two results to satisfy ourselves that the business is achieving as per the five-year plan.
“What I can say is that there’s been no further borrowings from the business and I’m looking forward to the report on quarter two.”
The councillor said the aim of the five-year plan was to take this business into profit.
“Housing companies will always need to borrow capital for projects. That is pretty normal. There isn’t a house builder in the country which will have sufficient capital to do the purchase of land and the development. So it’s pretty normal in the building industry to have borrowings.
“But if we’d wound up the company, it would have left losses to the council in excess of £20m.”
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