North Yorkshire Council
Shareholder Committee
2 September 2025
Brierley Group 2024/25 Outturn Financial Performance report
Report of the Assistant Director – Commercial, Property and
Procurement
1.0
PURPOSE OF THE REPORT
1.1 To update Shareholder Committee
on the financial outturn position for the Brierley Group for the
2024/25 financial year.
2.0
SUMMARY – BRIERLEY GROUP HEADLINES
2.1 The 2024-25 full year outturn
position across the Brierley Group shows a pre-tax profit of
£3.2m. The group also continues to deliver significant
additional value for the Council, with a Shareholder Value of
c£15.8m for the year.
2.2 The outturn position is
c£300k above the original budget for the year, although there
are some significant variations across the performance of
individual entities, as detailed below.
2
2.2
2.3
Align Property Partners and Align Property Services
continue to demonstrate continued strong performance and
profitability and are reportinga joint pre-tax profit of
£2.36m for the year. This represents a favourable variance to
budget of £855k and an improvement of £755k compared to
the Q3 forecast. Yorwaste and
NYNet continue to deliver
strong returns with NYC’s share of outturn profits projected
at £1.28m and £403k respectively. NYES has also
reported a surplus of £1.40m for the year, which represents a
significant turnaround in comparison to the trading loss position
reported in the 2022/23 year.
2.4
Brierley Homes is reporting a loss of £3.2m in
comparison to the budgeted £200k profit that was set for the
year, which is broadly in line with the position reported in the Q3
Finance Performance report presented to Shareholder Committee in
May 25. The Council achieved other shareholder value of c
£1.3m through the company - predominantly from margins
delivered on loan financing arrangements - reducing the net in-year
financial deficit position across both entities to £1.9m.
This position is due to delay in some sales from 24/25 to 25/26,
reprofiling of the construction programme to ensure returns are
maximised, and a move away from pure commercial housing delivery to
the provision of above policy affordable homes and progression of
more difficult Council owned sites to assist NYC in delivering
affordable homes targets at a pace that would be lacking if left
purely to the private sector. The delayed sales are caused by
several factors including planning and legal issues, and a
proportion of the reported loss represents a timing change to
revenues rather than a reduction to underlying profitability across
the full Brierley Homes development pipeline with sales, and
therefore profits, which were due to be achieved in 24/25 now
forecast for later years.
2.5
As reported at Q3, detailed work is underway to review the
operating model of Brierley Homes including the historic trading
position, future development pipeline and business plan
projections, profits, cashflow, and financial resilience. The key
findings from that review will be reported to the Executive on 16
September.
2.6
NY Highways
have a draft pre-tax profit of
£305k for the year, compared to a budget of £57k
with a shareholder value of £6.34m. In line with the
business plan aim of North Yorkshire Highways (NYH), namely - to
deliver efficiencies back to NYC as shareholder - at the end of the
year NYH returned £3.15m of revenue back to the Council
following a review of the schedule of rates charges claimed in the
year.
2.5 Brimham’s Active
ceased trading on 30th November 2024, with all Brimham’s
Active’s services transferring into North Yorkshire Council
on 1 December 2024. As a result, from 1st December onwards,
accounting for the services will be captured within the
council’s General Fund.
3.
Current Challenges
3.1
Brierley Homes was established in 2016, by the then North Yorkshire
County Council, to deliver homes for market sale with the profits
to be reinvested into frontline services. The company generates
broader shareholder value for the Council, primarily through loan
arrangements between the two parties - with the loans carrying
interest rates well above base rate to reflect the commercial
nature of the company’s operations.
3.2
Following Local Government Reorganisation Brierly Homes’
objectives have evolved, largely due to the new Council’s
role in increasing the supply of affordable housing units across
the region. In line with this move the company’s development
pipeline now includes the delivery of 500 homes in the next 4
years, 200 of which are affordable. This pace of affordable housing
delivery would be lacking if left purely to the private sector,
demonstrating additional shareholder value and benefits to the
Council, which are not yet reflected in shareholder value
calculations.
3.3 Based on
the current development pipeline the company are projecting that
positive cumulative shareholder will have been delivered to the
Council by the end of the 25/26 year.
3.4
On 19 August 25 Executive were
presented with a report regarding an urgent loan funding decision
for the company, which should be read in conjunction with this
report and can be found at the attached link
https://edemocracy.northyorks.gov.uk/documents/s55906/Brierley%20Homes%20Affordable%20Homes%20Funding%20Urgent%20Decision%2020250819.pdf
3.5 A review of the operating
model of Brierley Homes is currently underway and key findings will
be reported to the Executive on 16 September.
3.6
Challenges across the wider Brierley Group relate to resourcing,
recruitment and retention of professional staff, and inflationary
cost pressures.
3.7 The labour market continues
to be challenging in all sectors, limiting a lot of businesses
ability to expand, with a significant rise in the number of
economically inactive people, leading to vacancies across the
portfolio. Resourcing issues within the Brierley Group are
exacerbated by the ongoing workload pressures arising from Local
Government Reorganisation and a lack of capacity within the
Council’s professional support service teams to assist with
the development of growth plans across the Group.
3.8
General inflation (RPI) was
4.5% in April 2025 down from highs of 14% in November 2022.
Inflation has had substantial impacts across all companies with
particularly impacts on loan interest, utilities, and
overheads.
4
Current and future areas of
development
4.1
North Yorkshire Highways have delivered
works for a number of council functions outside of highways.
The year ahead will focus on consolidation of performance,
managing works to allow rates to be held to mitigate inflation,
delivery of the property arm of the company and a drive to assist
the NYC client team. New capital schemes will ensure NYH
continue to deliver value for money for the council, alongside many
other works.
4.2 Yorwaste continues to look for
opportunities to drive growth and is actively pursuing tenders and
larger contracts, despite market conditions remaining highly
competitive. There is a focus on “invest to save
projects”, and strategies are being progressed to maximise
the control of asset maintenance and servicing to minimise
disruption and costs.
4.3 Many
companies are undertaking initiatives to drive cost efficiencies
and address recruitment issues as well as development of future
sales pipelines.
5
2024/25 Q4 Brierley Group Financial
Summary
5.1
The following tables set out the
2024/25 draft outturn position and variance to budget for North
Yorkshire Council’s share of the Brierley Group, and the
total value to NYC as shareholder of the Brierley Group
companies.
Table 1 – Forecast Profit
Before Tax and Variance to Budget by organisation
Table 2 – Brierley Group
Shareholder Value
5.2
The above tables highlight a full
year forecast outturn pre-tax profit for the 2024/25 year of
£3.2m across the Brierley Group entities (£1.60m
excluding performance on General Fund related operations). Further
details by entity can be found in Appendix A.
5.3 A total Shareholder Value of
£15.75m has been generated by the companies: categorised by
group profitability, margins on support service contracts and loan
financing arrangements, along with other Shareholder Value in the
form of financial benefits and cost savings which the Council
derives from the trading and operational arrangements that are in
place with the Brierley Board entities.
6
Recommendations
6.1 For the Shareholder Committee to
note the report and the Brierley Group Financial Performance for
the 2024/25 year.
Kerry
Metcalfe
Assistant Director, Commercial, Property and Procurement
Corporate Director - Resources
Date: 22/08/2025
Presenter of Report
– Kerry Metcalfe - Assistant Director (kerry.metcalfe@northyorks.gov,uk)
Note: Members are invited to contact the author in advance
of the meeting with any detailed queries or questions.
APPENDICES:
Appendix A – Detailed Company by Company Update
North Yorkshire Education Services (NYES)
The 2024-25 outturn
position for NYES stands at £1.40m (after allowing for hub
costs and centrally allocated overheads of £1.77m). This
represents a significant turnaround against the trading loss
reported in 2022/23, and a £1.2m uplift against budget.
Cleaning and catering delivered a return of £750k above
budget due to lower material costs and staffing vacancies, and
payroll delivered £255k due to new contracts and staffing
vacancies. NYES has placed particular emphasis on the maximisation
of training income this year, focusing on high-volume, low-cost
sales with significant profit potential. This effort has paid off,
with sales income totalling £340k being generated in the
year; representing a 70% uplift against the £200k achieved in
the previous year. Training is seen as an area of potential further
growth and an income target of £390k has been established for
the 25/26 year.
Customer attrition due to academisation and Multi Academy Trust
(MAT) mergers poses a significant long term threat to the business
model of some of our services. Increasingly, MATs are merging into
larger “super MATs” and schools are joining MATs that
already have their own provisions for professional support
services. While bidding for and winning such MAT contracts presents
a growth opportunity, accommodating the typical size of these MAT
contracts may require extra service capacity building and further
development of our own bidding and contract management
expertise.
NYnet
NYnet’s 2024-25
draft outturn profit stands at £403k, which is broadly in
line with the Q3 projection. Higher than budgeted sales on
diversified portfolio have contributed additional costs as these
sales are at lower profit margin, gross profit margin is lower than
the year-to-date budgeted level.
Connectivity remains
the largest contributor to the revenue. NYnet have seen steady
increase in orders from private sector customers as well as on
diverse portfolio. IoT (Internet of Things) trials are
ongoing with new locations and solutions identified. NYnet is
continuing to work on diversification of product offering as well
as expanding the service offering to outside of the county. This is
a difficult market to capture but the sales team have seen some
promising leads.
NYnet has secured the
new North Yorkshire Police and North Yorkshire Fire & Rescue
contract within the year, which will help strengthen the revenue
targets for next 5 years.
First North Law
First North
Law’s (FNL) outturn profit before tax for 2024-25 stands at
£54k against a budget of £42k. The company had a
good year, with turnover increasing in line with business plan
projections.
First North Law has
an ambitious business plan to continue to grow at a rate of 30%
year on year over the next few years. Whilst this is a
challenge, FNL has been appointed to a national YPO framework which
has increased its presence in the market and a number of new
clients have been onboarded in the last 6 months. Servicing
this work will be the main challenge but FNL appears to have turned
a corner with recruitment and now has access to additional
capacity, which should support future year growth.
Brierley Homes
The draft outturn
position for the 24-25 year shows a net loss of £3.2m after
taking account of £2.3m financing costs and £1m in
overheads. This position is broadly in line with the projections
reported to Shareholder Committee in May. The forecast outturn
position is largely driven by delays in the receipt of sales
income, associated increases in the company’s financing costs
and a move away from pure commercial housing delivery to the
provision of above policy affordable homes and progression of more
difficult Council owned sites to assist NYC in delivering
affordable homes targets.
The delayed sales are caused by several factors
including planning and legal issues, and a proportion of the
reported loss represents a timing change to revenues rather than a
reduction to underlying profitability across the full Brierley
Homes development pipeline with sales, and therefore profits, which
were due to be achieved in 24/25 now forecast for later
years.
Following a move to
direct contracting as the main delivery method, the model is now
being used for all sites presently under active construction.
Combined with the expansion of the current development pipeline to
six active sites and a further ten in the extended pipeline, this
brings several challenges across a range of areas. These include
the commissioning and active management of multiple sub-contractors
as well as enhanced responsibilities around CIS, coupled with a
substantial increase to transaction volumes. Additional resources
were recruited during 24/25 to manage the development of the sites
and additional support services have been bought in to support
future development of Brierley Homes.
Brierley Homes has
continued to gain momentum in securing a positive pipeline of over
500 homes with over 200 of them being affordable with estimated
delivery for all in the next 4 years. The company has also enabled
the grant of £2.6m for a 49-unit affordable scheme at
Broomfield’s, to be secured with the continuation of working
relations with Broadacres and the NYC housing team. The confirmed
pipeline is made up from all NYC existing sites.
Brierley Homes future
development profile includes a shift in strategy for forward
profiling to where they are delivering 100% affordable under
contracts with monthly payments. This will improve their ability to
predict income more accurately and will have a positive impact on
cashflow.
Considering the
company’s trading position, and changes in the objective of
supporting the Council in the delivery of affordable housing, a
review of the company operating model is underway. The review will
include the historic trading position, future development pipeline
and business plan projections, profits, cashflow, and financial
resilience. The key findings from the review will be reported to
the Executive on 16 September.
Align Property Partners / Align Property Services
The combined draft
outturn position for Align Property Partners and Align Property
Services includes a profit for the year of £2.36m, which is
£855k above the £1.50m target and a £777k
improvement against the Q3 forecast. A £1.0m dividend
was approved and paid to NYC in 2025, in recognition of
Align’s recent strong financial performance.
Recruitment and
retention of appropriately skilled staff in a competitive
marketplace remains a challenge as Align continues to expand into
new markets. A number of apprentices are due to start in financial
year 2025 to help mitigate these challenges.
Yorwaste
Yorwaste made a
pre-tax profit of £1.65m for the year; £1.28m of which
relates to NYC’s share of the company. This represents an
increase of £299k against the previous year and an
improvement of £1.243m against the original profit
target.
The positive variance was partly due to strong
commercial net revenue with collections revenue, third party
tipping and third party recyclate processing all being strongly
favourable to expectations. Yorwaste have recently won 2 tenders
worth £200k, including one from a major competitor.
Total operating costs were lower in real terms
compared to the same period last year driven by cost efficiency
measures and increased asset optimisation which has improved
significantly over the past few years, so the company is now
carrying greater volumes on fewer vehicles.
Whilst commercial collections have performed
well, wider market conditions are expected to see increasing price
challenges arising against the backdrop of an economic slowdown.
These same market conditions will present added cost pressures for
Yorwaste over the coming year and beyond and the company continues
to explore opportunities to help mitigate their impact.
Veritau
The outturn position
for Veritau shows a profit before tax of £51k for the year,
£20k of which relates to NYC’s shareholding.
Total fee income for the year was higher than the original budget
due to the addition of two new member councils and continued growth
in external work. The cost of sales was also higher as a
result.
The main focus for
the business has been the establishment of Veritau Public Sector
Limited (the new Teckal company). VPS started trading on 1
August.
Recruitment and
retention remains a key risk. To maintain capacity within the
business, Veritau ran a successful recruitment campaign in Q3 for
graduate trainees, Information Access Officers and Information
Governance Support Officers. The company have also completed a
number of internal promotions. Further recruitment of trainees
and Information Access Officers is continuing.
North Yorkshire Highways
The year end position
for 2024-25 is a profit before tax of £305k, representing an
increase of £230k against the Q3 projection. Shareholder
Value stands at £6.34m and largely comprises cost savings and
efficiencies that NYC derives from the NYH trading arrangements, as
opposed to delivering works through external contractors.
NYH is performing
well despite the challenges of recruitment and budgetary pressures
and is increasingly being seen as the organisation within Brierley
group that can deliver NYC construction and maintenance works. NYH
is also focussed on establishing efficient processes so that
efficiency savings can be realised by NYC.
The year ahead will
see a concentration on consolidation of performance, manging works
to allow rates to be held to mitigate inflation, delivery of the
property arm of the company and also a drive to assist the NYC
client team with the maintenance elements of the client side. New
capital schemes along with many other works will ensure that NYH
will continue to deliver value for money for the council.
Bracewell Homes
Bracewell Homes is
reporting a draft profit before tax of £408k for the year and
a shareholder value to NYC of £443k. This represents a
positive variance of £164k against budget due to an increase
in trading income as a direct result of Bracewell Homes
successfully selling an additional property in year ahead of
forecast, as well as a realignment of spend between cost of sales
and overheads.
Interest paid is
significantly lower than budget, due to an improved cash flow
position resulting from the sale of additional properties.
Maple Park
Maple Park was
transferred back to the council on 1st of October 2024, with
Hambleton Holdings and Maple Park LLP being wound up. The draft
forecast pre-tax profit position for 2024/25 is £233k.
Brimhams Active
Brimhams
Active ceased trading on 30th November 2024, with all Brimhams
Active’s services transferring into North Yorkshire Council
on 1 December 2024. As a result, from 1st December onwards,
accounting for the services will be captured within the
council’s General Fund.
The figures quoted
above reflect the company trading position for the period 1 April
24 to 30 Nov 24. The £25k budget deficit detailed within this
report has been adjusted to take into account additional management
charges that NYC has been charged during the trading period.
