Bexley Councils commercial housing company could lose millions of pounds if the coronavirus pandemic results in a slide in the housing market, a report to be considered at the authoritys first remote meeting reveals.
Members of the boroughs executive committee are set to receive the sobering details surrounding BexleyCo, the councils wholly-owned development firm, in their first meeting to be held entirely online on May 5.
According to a report to be presented to members, the impact of a 10 per cent reduction in private sales anticipated from the coronavirus fallout would see development profits at BexleyCos Old Farm Park fall from £3.825m to £1.594m.
Construction on the 58-home scheme at Sidcup started in December and represented BexleyCos first development.
According to the report, a 10 per cent fall in private sales would also see total pre-tax returns on the project fall from £9.023m to £6.825m.
Construction is set to resume at the site on May 4, which would mean a six-week delay since tools were downed as a result of the pandemic.
The company is also in the planning stage for two other projects at Lesney Park and West Street. While initial analysis suggests they will provide a return to the council, documents state “this is likely to be £1.018m lower than anticipated”.
The report emphasised the need for the planning process to be ushered along in a bid to kickstart the economy, while acknowledging there is “likely to be a longer-term impact on the UK economy including the housing sector” as a result of Covid-19, but “the extent to which the market is affected and for how long is unknown”.
“Key priorities to reducing any long-term impact of the Covid-19 crisis must include enabling the housebuilding industry to restart as quickly and safely as possible after the cessation of the lockdown restrictions,” the report states.
Councillors will also be updated on the progress of hiring a managing director for BexleyCo.
A shortlist of three has been narrowed down from 32 applicants, after the position was advertised earlier this year.
Among the conditions already agreed for the role are a salary paying up to £120,312 per annum with potential performance related pay worth an additional five per cent, and 32 days of annual leave.
Bexley already live streams the majority of its public meetings, but new arrangements so councillors themselves could sign-in to online sessions remotely had to be hammered out.
The meeting is set to be broadcast on the councils website as it was pre-lockdown.