A Conservative council leader in Yorkshire has insisted his authority's spin-off property development firm is "here to make profit" to plough into other services after facing calls to use some of the funds generated to boost social housing.
North Yorkshire County Council's Brierley Homes, one of seven companies which form its trading arm the Brierley Group, was set up in 2016 and recently built its first houses in the village of Thorpe Willoughby near Selby.
In an interview with The Yorkshire Post, the authority's leader Carl Les said the point of the houses is to make profit which can be used to pay for the increasing cost of paying for adult social care and children's services.
It comes after Liberal Democrat councillors called for 20 per cent of profits from Brierley Homes to be ploughed into boosting the relatively low amount of social housing building in the county. The suggestion has now been referred to the authority’s corporate and partners overview and scrutiny committee.
Coun Les said the opposition councillors were "missing the point". He said: "The point is we want to maximise profits to put into other services. We might end up doing some affordable or social housing, and the classic case might be, say, in the Dales, where the issue is that it's essential to have some houses that young people can afford.
"We might say the priority for us in that location is to build some affordable homes to support our other services. Because otherwise you might have care workers coming all the way from Tyneside to work, which isn't efficient."
The call from Liberal Democrat councillors Geoff Webber and Bryn Griffiths follows a study by the Royal Town Planning Institute revealing while at least 9,000 homes were directly created by local authorities in England in the 2017/2018 financial year, North Yorkshire had among the lowest rates of new social housing.
It also comes after Conservative peer and chairman of the Local Government Association Lord Porter emphasised that “council housing is one of the biggest and most important services that councils deliver”, saying that their provision affected the cost of every other service that councils deliver.
While the likely annual profits of Brierley Homes, which was launched in 2016, remains unclear, the council’s trading arm The Brierley Group generates annual sales of around £95m, and contributes £2.2m towards the costs of the council and adds £3.6m profit on top.
However, despite having secured more than £157m in savings since the start of austerity, the council must find a further £40.3m in the next three years, which represents an overall reduction of nearly 40 per cent in its spending power since 2011.
Coun Les said he was confident austerity was coming to an end after the former Prime Minister and Chancellor said so during the last Tory party conference, and welcomed new Prime Minister Boris Johnson's recent raft of spending promises.
He said: "We have done our part, we have done things more efficiently and innovatively to compensate for the loss of 40 per cent of the spending power. What you can't do with efficiency savings is manage growth and we are seeing a huge growth in demand for adult care.
"It is a great problem to have, I wish my parents had lived longer than 68 and 76. But the older people get the more complex their needs and the more expensive their needs, so we are getting more people living longer, which is good news."
The Conservative, whoi became leader in 2015, said North Yorkshire "runs on volunteers" and cited the example of the county's libraries, which are now run by volunteers with some local authority help.
He said: "I grew up in Leeming village, the clubs and societies were all run by volunteers, so to me going to the community and saying we need some help, we've had to do that since austerity was introduced in 2010, we've got a good track record of how the community has worked to deliver these things."
He added: "Good government is all about a partnership between Whitehall and the town hall or county hall. I think we have a good relationship with our government, we have a good cohort of MPs in North Yorkshire, in the Theresa May government I think every one of them had a role in government.
"We were able to use our MPs to lobby on our behalf and we were able to talk to Ministers and I've gone down a number of times to London and spoken to Ministers. I've always found them willing to listen, it doesn't mean they always agree witj your argument or that they can do something about it."