Councillors told ‘don’t be another 3 Rivers’

Housing company activities put on ice

Torbay Council has been accused of turning its back on families in need by cutting back support for its housing company TorVista.

Members of the full council have voted to put the company’s operations on ice while its future is worked out. It can carry on with projects it has already begun but will not be able to take on any new work.

It will have to slash operating costs from £370,000 a year to a maximum of £223,700.

Councillors agreed to write off a £1.5 million loan and to stop council-owned TorVista borrowing up to £25 million for other projects. It will also commit £115,000 to keep the company going until March.

Members heard that the action could prevent the bay ending up with ‘another 3 Rivers’, referring to the housing company set up by Mid Devon District Council which is to stop trading after racking up debts of more than £20 million.

But angry opposition councillors opposed the move. “This administration knows the price of everything and the value of nothing,” said Cllr Steve Darling (Lib Dem, Barton with Watcombe).

In July 2019 the council’s cabinet approved up to £25 million in ‘prudential borrowing’ to get TorVista off the ground, as well as a £1 million loan for ‘working capital’ which was then extended to £1.5 million.

The company was supposed to provide social housing for families in need while generating income for the council, but escalating construction costs, soaring interest rates and the effects of the pandemic mean it has not been able to meet targets.

It has planning permission for around 300 homes in locations including the Crossways complex and Preston Down Road in Paignton, but it currently owns and manages just 32 units.

Cllr Alan Tyerman (Con, Churston with Galmpton) said: “The environment has changed, and it is becoming far more challenging to make projects viable. I don’t think we are alone. Everyone is facing the same challenges.”

The full council heard the company is incurring ‘significant’ costs of around £370,000 a year with no source of funds, and the financial liability will fall on Torbay Council.

Council leader David Thomas (Con, Preston) said: “Is this decision about money? Yes it is – unashamedly yes it is. If we don’t deal with this a future administration could be looking at a black hole of £25 million. I’d rather deal with it now, but it’s not going to be easy.”

And deputy leader Chris Lewis (Con, Preston) added; “I’ll bet Mid Devon wish they had learned from their mistakes before they got to £20 million, and that’s why we are taking hard decisions.

“This is £1.5 million of good ratepayers’ money blown away, but we won’t be going down the Mid Devon route and find the figure has gone up to £20million.”

But Cllr Mandy Darling (Lib Dem, Tormohun) said: “We are in the middle of a housing crisis. We have people sleeping in tents.”

And Cllr Darren Cowell (Independent, Shiphay) added: “For this administration it is all about money, but for me and members of the public it’s all about people. This obsession with pound notes over people has to stop.

“This is an ideologically-driven process to remove the responsibility of Torbay Council to provide for some of the most vulnerable people in Torbay.”

Cllr Adam Billings (Con, Churston with Galmpton) denied the council had turned its back on social housing and Cllr Chris Lewis (Con, Preston) told the meeting: “Torbay needs more affordable housing but I don’t believe it’s for Torbay Council to actually build these houses.

“Leave it to the experts, they know what they’re doing.

“Councils that put their hands into building houses find themselves millions of pounds in debt.”