Council-owned developer faces £7.7m cash shortfall

A council-owned developer could face a £7.7m cash shortfall by 2029, a report has warned.

This Land, which is wholly owned by Cambridgeshire County Council, could be unable to repay loans and interest it owes the authority, it said.

The council-owned developer said sales and developments were broadly "on track", but that delayed property deals left it with less money than it had predicted this year.

A report said: "On the current forecast, [This Land] would not be able to meet the final loan and accrued interest obligations without additional receipts, changes to timing or other shareholder-supported mitigation."

The council's shareholder sub-committee is due to discuss the report on Tuesday.

This Land was set up by the county council in 2016, and builds homes or sells parcels of land to other developers, including projects in Burwell, Soham, south of Cambridge, Landbeach and Histon.

It obtained building consent for Eddeva Park, a site with 230 homes south of Cambridge, in 2021, and has been granted permission to build 540 new homes on land on the edge of Soham, which it is looking to sell.

It owed the council £58m as of February, with a further £22.5m due in interest.

Revised forecasts suggest the company could face a cash shortfall of about £7.7m by March 2029, leaving it unable to meet its final loan and interest obligations without intervention.

The report said: "The current forecast is not an immediate insolvency event and officers are working with [This Land] and advisers to assess options to protect the council's position and address the 2029 cash flow risk."

It added that This Land was working with council officers and other advisers to manage its cash flow, and expected £4m in repayments, due on 30 November, would be met.

This Land is expected to post a pre-tax loss of £2.7m this year, around £400,000 worse than expected, partly after house sales at its Eddeva Park site were delayed.

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