The above is from a report going to the Policy and Resources Committee on 5 September. You can read the entire report, apart from the detailed financial projections which must be in the secret appendix and which would be informative, here.
Here are the supposed key benefits:
That final bullet point is ridiculous. The only way that the Barnet Group could shrug off responsibility for a loss making subsidiary would be to liquidate it and leave the creditors unpaid which Mr Mustard opines isn't how a local authority trading company should, or hopefully is likely, to behave. There is no doubt but that the money of the council tax payer is at risk. Mr Mustard has now read further through the report and found this contradictory statement:
A reduction in your balance sheet comes about by paying a financial liability.
How confident can we be that this venture won't lose more than £400,000 in the first year? (and no private company setting up in the lettings business would budget in such a way, they would start more prudently and grow organically) Let's go back to a previous venture started by the Barnet Group, Your Choice (Barnet) Ltd, the aim of which is to make money out of offering specialist care and support to adults with a range of physical and learning disabilities.
Going back to the original projections given to Barnet Council, at the end of year 4, accumulated losses were projected to be £80,000 but in fact there is a Revenue reserve deficit of £268,000 so losses are worse than guesstimated. How can we trust the scant figures that are in the public domain?
Does Barnet even need another agent in the lettings market?
Should a local authority even act in this way? using their almost unlimited financial reserves to compete with businesses, many of them quite small ones?
Finally, Mr Mustard asked a contact in the field and this is what they said.
My experience of landlords who have used Barnet to rent their homes is that they have not been happy with the quality of tenants nor the condition the property is returned in.
The agenda item is though bound to be quickly voted through with nary a perceptive question being asked.