A COUNCIL's leadership has spoken of its confidence that a group of firms it established five years ago partly to generate funding for frontline services will start to generate a profit after reporting successive losses.

Trading figures for the Brierley Group, North Yorkshire County Council’s commercial arm, show its revenue for the financial year ending in April was £12.5m lower than it had budgeted for, resulting in a loss after tax of £327,000 against a forecast profit of £324,000.

The negative balance sheet comes a year after the group reported a loss of £639,000, sparking questions over whether the council had the necessary business acumen to run the array of firms, which range from housebuilders to lawyers.

A meeting of the authority’s shareholder committee heard the Brierley Group delivered had delivered “a mixed outturn” again due to the ongoing impact of Covid and “a challenging trading environment”.

An officer’s report to the meeting stated staff recruitment and retention, high energy costs, rising material costs and issues brought about by schools academisation were among many hurdles the group’s firms faced last year.

Officers said building design consultancy Align, broadband provider NYNET and waste management firm Yorwaste had delivered strong performances ahead of budget, but housing developer Brierley Homes and road maintenance firm NY Highways had posted losses for the year.

Officers stated Brierley Homes’ historic performance has been impacted by timing delays to the programme through construction to sales completion, but sales off plan remained strong.

They stated Brierley Homes’ loss was in line with budget as three sites

were in a construction phase during the year with the sales to be realised in the coming months, while NY Highways’ loss was due to higher costs during its first year of operations.

Large-scale restrictions into schools impacted on their immediate priorities, the report added, creating further trading difficulties for its education services firm NYES.

As a result of the losses and trading conditions the group has moved to refine and streamline some of the businesses.

Although the local authority’s leadership has previously emphasised the group of firms provides millions of pounds of benefits in kind and improves council services, following the publication of the Brierley Group’s latest figures they said a financial turnaround was expected in the coming months.

While some of the council’s ventures were launched in response issues such as the failure of the commercial market to provide services, including its broadband firm NYNET, Brierley Homes was set up entirely to generate profits to support the council’s overall budget.

The council’s leader Councillor Carl Les said once Brierley Homes’ sales started to flow there would be “a complete reversal in the set of circumstances because we’ll have money flowing in”.

He added: “If you look at the forecast for future years, once the housebuilding is complete and selling takes over I think you’ll see a significant improvement in the Brierley Group’s overall financial picture at that time.”