Debts will account for profits
By Elgan Hearn, Local Democracy Reporter
During its first year, HOWPS made an operating loss of £700,000 and following deduction for income tax this came down to £626,000.
For several months, councillors have been worried about HOWPS’ future due to the financial issues of its Joint Venture partner Kier.
There have been calls made by some councillors to bring property maintenance back in-house.
Labour Group Leader, Cllr Mathew Dorrance, received an answer that HOWPS were expected to contribute £99,000 to the last financial year’s (2018/19) budget.
At PCC’s last full council meeting, Cllr Dorrance asked the follow up question: “I understood that HOWPS made a significant loss in the last financial year of around £700,000 and £350,000 of that was absorbed by the council.
“Now your response to my question says that they are projected to make a contribution for 18/19 of around £99,000. Are you going to leave at that?
“Or are you going to pursue the full £350,000 to ensure the tax payers who are already contributing to an inflation busting 9.5 per-cent council tax rise, get good value for money?”
Portfolio holder for finance, Cllr Aled Davies, who is also one of HOWPS’ directors, replied: “Unfortunately the out turn is not available at the moment, (amount expected by a certain time, usually end of year.)
“The £99,000 projected was done back in March, our share of the loss for this year is £290,000.
“Any subsequent profit by HOWPS will be written off against the existing loss. HOWPS performed far better in their second year than they did in the first year, we will rectify their losses.”
HOWPS is a joint venture between Powys County Council and construction group Kier and looks after 5,400 homes and 630 properties in the county.
The joint venture started in July 2017 after 109 workers were transferred to the company.
During the last year, HOWPS have had a turbulent time which has been partly to do with fears that Kier could collapse.
In recent months it has been reported that Kier has had to axe up to 1,200 jobs.
They are looking to sell its property arm and land in order to bring its debt levels down to £420 to £450 million.
In January, Kier’s chief executive Haydn Mursell was forced to stand down after launching an unpopular share rights issue to reduce its debt. Last week, Kier shares plummeted to just 87p. On July 10, 2018, they had been worth £9.58.
In February, due to HOWPS’ failure to lodge their accounts with Companies House on time, they were given a compulsory strike off notice. After the accounts were lodged the strike off action was then discontinued.
Changes have also been going on behind the scenes with HOWPS chairman, Phil Oades, leaving on May 31. On the same day David Mawson was added to HOWPS roster of directors.
Mr Mawson is noted with Companies House as a director of six Kier companies including Kier Facilities Services Ltd and Kier Services Ltd.
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