The Conservative Group of councillors have come under fire from opposition councillor, Richard Quigley, following the launch of their housing paper.
The Labour councillor for Cowes North, Richard Quigley, says he has had it confirmed by the Finance Director that the Conservatives’ February 2022 budget amendment was flawed. Cllr Quigley says it has prevented any borrowing to build houses.
“Flawed budget amendment”
Cllr Richard Quigley told News OnTheWight,
“After speaking with our Finance Director, due to changes in government rules on investment, councils don’t have to make a profit of any particular level, but can’t incur any losses.
“This means the Tory amendment to the budget last year, to increase borrowing to £40m, but reduce the amount of capital in the housing company to £1.5m and spend £500k on tree planting instead, means that it would make a loss in the first year, thus preventing any borrowing to build houses from happening.
“Far from having a plan, the Tories have guaranteed that no development will take place. They have put politics before the people of the Island, yet again”
Clarification sought from Cabinet member
Cllr Quigley had asked the Cabinet Member for Housing, Cllr Ian Stephens, for clarification of this fact at last week’s Full Council meeting.
He asked,
“Can you confirm that the amendment in last year’s budget to increase the spending on affordable housing to £40m, but reduce the capital in the housing company by £500k actually stopped new housing being built due to the new government regulations on no ‘in year’ losses and that the original amount would have protected that company from making in year losses, but now isn’t sufficient for that company to start building houses.”
Stephens: Can’t meet 5% profitability with affordable housing
Cllr Stephens replied,
“The amendment at the last budget did have an effect on the approach that we were making to the Section 151 officer [the finance director] because we were told that if we went out and purchased, we would have to bring in five per cent above the purchase or build costs.
“You can’t look at five per cent profitability when you’re looking at affordable housing rents and prices.”
Robertson: All amendments agreed with the Finance Director
In response to Cllr Quigley’s comment to News OnTheWight, Cllr Joe Robertson, leader of the Conservative Group of councillors, said,
“All our amendments were discussed and agreed with the Finance Director (Chris Ward) in advance of the Budget last February who, by law, has to consent to the viability of any budget amendments before they are tabled.
“Richard Quigley seems to be suggesting that if you stuff an extra million in the bank account of a company and it ends up with a zero balance at the end of the year then it did not make a loss. This is complete nonsense. It will have made a loss of £1 million and will be out of funds.”
Finance officer said amendment was flawed
Cllr Quigley confirmed to News OnTheWight that in December he’d had a conversation with the Finance Director, Chris Ward, who had told him,
“The budget amendment was flawed, by reducing the amount of capital in the company, it means it is unlikely to meet the rules on no ‘in year’ losses.”
The Isle of Wight council have subsequently disputed this, saying that this is not a direct quote from the council’s section 151 officer (finance director), but Cllr Quigley is standing firm that this is what he was told.
Clarification from the council
A spokesperson for the Isle of Wight council wishes to clarify the record with the following statements:
- The council set a legal budget in 2022/23.
- The budget amendment reduced the likelihood that the council would be able to borrow money to deliver affordable housing schemes. but did not prevent it
Article edit
10.10am 28th Jan 2023 – Article updated with clarification from the council.
10.43am 28th Jan 2023 – Article updated with clarification from Cllr Quigley about finance director’s quote.
