The council will consider the case for continuing with James Elliman Homes (JEH) which has made a loss since 2020
Slough Borough Council is considering options for its loss-making wholly-owned housing company, James Elliman Homes, due to ongoing concerns over its financial performance and governance issues.
Since 2020, James Elliman Homes (JEH) has operated at a net loss, with unaudited accounts for 2023/24 showing a £1.3m loss last year.
The company has also filed its financial accounts late for the last two years, leading to Companies House taking action to compulsory strike off JEH on both occasions and issue penalties.
Strike-off action was averted following intervention by the council to support the company.
The report stated that JEH does not have a fully functioning board, which “has contributed to the company struggling to comply with regulatory requirements to file audited accounts within the prescribed timescales”.
JEH does not have directly employed staff and all properties are managed by the council under a service level agreement.
The report states that the JEH board has not been able to properly contract manage the arrangement with the council to ensure regulatory requirements are met, homes are maintained to a decent standard and rent arrears and voids are managed.
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The council will now require the company’s board to submit a draft business plan for 2024/25 to the cabinet by 18 October. The plan will set out options for returning JEH to profitability, alongside risks and mitigations. The board will also need to carry out a skills audit and provide an up-to-date risk register.
The council will conduct an options appraisal for the company ”to consider the role and case for continuing with JEH.”
During a cabinet committee meeting on 12 September, council officers noted that one of the problems was “insufficient” separation between the council and the company.
Slough Borough Council (SBC) set up JEH in 2017, with the aim of increasing affordable housing supply for key workers and for people on lower priority housing bands who are unlikely to get a council home.
Although JEH was intended to provide housing for key workers and those in Band C on the housing waiting list, in its early years, at least 121 families in temporary accommodation were placed in JEH properties.
As a result, around 80% of the homes are rented at or below Local Housing Allowance (LHA) levels, leading to significantly lower income than expected.
In July 2021, Slough Borough Council issued a section 114 notice after revealing a £56m deficit in its budget. In December 2021, the government appointed commissioners to oversee SBC’s finances.
Earlier this year, the government said that SBC’s progress “has been insufficient and inconsistent”.
Commenting on the report, commissioners said the council needs to consider whether it should continue to run each of its subsidiary companies, including JEH. It said SBC must assess ”whether it has the organisational capacity to maintain adequate oversight” of the company.
The council will now require the company’s board to submit a draft business plan for 2024/25 to the cabinet by 18 October. The plan will set out options for returning JEH to profitability, alongside risks and mitigations.
Slough Borough Council leader, Dexter Smith, said that the council will “make sure the rights of tenants are reserved” as it considers the future of JEH.
Councillor Gurcharan Manku said JEH could still be “a good asset” for the council, adding “let’s make it work for us and our residents”.
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