The business ventures of Redbridge Council have been rated as “high risk” because they lack transparent oversight or up-to-date business plans, a council finance director has said.

Since 2017 the council has set up a number of wholly-owned companies for services such as housebuilding, education and waste collection.  Operational director of finance Ian Ambrose told Monday’s (1st November) governance and audit committee he would be “more comfortable” once there is transparent monitoring of decision making.

This will be helped by a new oversight board, known as the Shareholder Reference Group (SRG), which will publish reports on what the companies are doing.

Before the group was set up, Redbridge’s leadership was able to limit what information was available to councillors and the general public on the grounds that it related to “financial or business affairs” of their companies.

So far, waste and recycling company Redbridge Civic Services (RCS) is the council’s only fully operational business. A report published through the SRG shows it is expected to make a £141,000 loss this year from an income of £5.4million.

Ambrose said: “The risk for me still remains red on the basis that it’s got one active trading company, RCS, which is now in a proper cycle of reporting into the Shareholder Reference Group.

“So that’s feeling secure, but the other companies are nascent.

“Once we’ve got those companies in a robust live environment where they get the proper transparent monitoring through the group, I personally would see the strategic risk downgrading to amber.”

The council’s housebuilder, Redbridge Living, was “effectively paused” in September because it was no longer “cost effective”, said Ambrose.

Redbridge Living’s three proposals would have added 489 homes to the borough, but were rejected by the Greater London Authority as they lacked enough affordable housing.

Conservative councillor Anita Boateng asked what had changed with the council’s approach to its companies. She said: “[SRG] is making sure that the governance around the companies is effectively transparent and public and available to all members, as opposed to an officer’s talking shop. 

“I think the council has been on a journey in terms of use of the companies.”