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Council leaders criticised for failed housing firm

Paul Moseley
BBC political reporter, Norfolk
Eleanor Storey
Local Democracy Reporting Service
Getty Images A housing construction site with a number of partially built houses. There is a lorry in the foreground carrying construction materials, and fencing surrounds the site. Getty Images
Lion Homes was set up to help deliver new and affordable homes in Norwich

A councillor has accused council leaders of having a "lack of oversight" after a private housing company owned by the authority lost millions of pounds.

Norwich City Council's Labour-run cabinet agreed to put its affordable housing arm, Lion Homes, into liquidation at a meeting on Wednesday.

The company was founded as Norwich Regeneration Limited in 2015, but in 2020 it emerged it had lost £6m when homes in Bowthorpe were sold for less than they cost to build.

Lucy Galvin, a Green councillor, said: "There has been a lack of oversight, direction and leadership in the lead-up to the collapse of Lion Homes."

Carli Harper, a Labour councillor and the cabinet member for finance and major projects, told the meeting it was now cheaper for the authority to develop homes by borrowing money from the government.

The firm was founded to build affordable homes and generate income for the authority, but opposition councillors said it had been poorly run, the Local Democracy Reporting Service said.

Paul Moseley/BBC Lucy Galvin looks directly at the camera, unsmiling. Se has brown hair and is wearing a green top with dark cardigan. She has shoulder-length brown hair. She is standing in a glass atrium. Paul Moseley/BBC
Green councillor Lucy Galvin said there had been a "lack of leadership" from the authority for Lion Homes

Whilst no accounts have been filed for Lion Homes since 2023, Companies House records show it made losses of £5m in the previous five years.

The council has invested £3.5m in the company and loaned it a further £6.1m to keep it viable.

Speaking at the cabinet meeting, Karen Davis, an Independent Norwich Group councillor, said: "Lion Homes was predicated on a pipeline of sites that was never delivered and a loan agreement that the council never set up or allowed Lion Homes to draw down.

"With no land to build on and no money to build, how did the cabinet expect this company to remain solvent, let alone profitable?"

Martin Barber/BBC Norwich City Hall, a four-storey brick building with clock tower, columns at the front and a flag pole. Photographed under a blue sky. Martin Barber/BBC
The city council loaned the company millions of pounds to try and keep it viable

In response, Harper said: "Lion Homes was established in good faith and with good intentions to build affordable homes and generate income for our city. But the economic context has changed dramatically.

"We are closing Lion Homes so that we can deliver housing directly through the council and bring operations back in-house.

"It is much cheaper for the council to deliver housing itself by making use of government loans than going to the market."

Following calls for an investigation into the closure of the company, the cabinet agreed to ask the authority's Scrutiny Committee - which is made up of opposition councillors - to undertake a review.

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