Powys property service venture £392,000 in the red

HOWPS is a joint venture between the council and construction group Kier, looking after 5,400 homes and 630 other buildings.

Under the questions at anytime protocol, Plaid Cymru group leader Councillor Elwyn Vaughan put the firm under the microscope.

Councillor Vaughan asked: “Please confirm the total amount of investment or money that Powys council has put into HOWPS since the beginning."

Councillors Aled Davies and Phyl Davies both said: “There has been no direct investment in the joint venture to date.

“The business plan has been developed to fully fund the organisation through delivering the services,

“This is worth around £12.5million a year and the contract is approaching its third anniversary.

“The council is liable for 50 per cent of the any loss made by the company but also gains proportionally any profit.

“To date overall loss and this sits on the council balance sheet at a value of £392,000 as at March 31.”

Councillor Vaughan also asked: “What conditions or break clauses exist in the contract with Kier which enables a clean break in the partnership?”

Written notice

Councillors Aled Davies and Phyl Davies replied that the 10-year contract has a break clause on the fifth anniversary of the contract which would be in July 2022.

But, written notice warning of the terminiation would need to be given six months earlier.

“This would be a potentially expensive option in terms of having to provide compensation,” they said.

The joint venture started in July 2017 after 109 workers were transferred to the company.

The county council has four members on the HOWPS board.

They are finance portfolio holder Councillor Aled Davies, education and property portfolio holder CouncillorPhyl Davies, head of finance Jane Thomas and director of economy and environment Nigel Brinn.

There have long been concerns amongst councillors about the performance of HOWPS, with calls to bring the service back in house.

Over six months ago they were asked to appear before the economy, residents, communities and governance scrutiny committee discuss their second year performance and have yet to do so.