The Royal Borough of Windsor and Maidenhead set up a wholly-owned private firm, now known as RBWM Property Company (PropCo), in 2011 to provide affordable homes and housing for key workers.
But the council’s current leader Simon Werner said that it actually worked to hide decisions from the public, and blamed it for controversial property deals.
Councillor Werner said: “It seems to me that it was a deliberate vehicle for hiding the decision-making process from councillors and from the public, and basically a mechanism for putting property developers at the heart of the decisions rather than putting the residents first.”
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He claimed that ‘through the property company’ previous council leaders ‘put the interests of developers ahead of residents, agreeing deals with developers that were designed only to benefit themselves’.
Councillor Werner was speaking as RBWM council leaders voted to abolish PropCo’s current structure and replace it with an asset holding company under more direct council control.
PropCo’s role expanded in 2016 to become a ‘property management company’ that played a role in major ‘joint venture’ regeneration projects between the council and developers.
But councillor Werner said that while these deals benefited developers, RBWM lost out.
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He also said the firm had not provided the affordable homes it was set up to deliver.
Councillor Werner said: “The property company pursued the so-called joint venture schemes which are actually nothing of the sort – more delayed purchase schemes where the council only receives the residue of any money left after the developer has paid a profit or their costs.
“These so-called joint ventures basically take away any risk from the developer and puts the risk solely on the council.”
He added: “The previous administration through the property company was left with only something like £12 million from the sale of the Magnet site when it was supposed to be raising the £38 million to pay for the new leisure centre in Maidenhead.
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“Instead the cost of that was added to the debt pile we’ve now inherited.”
Council leaders voted to bring PropCo in house after an independent review into the firm by the Chartered Institute of Public Finance and Accountancy (CIPFA).
The review found that PropCo employed an ‘expensive management team’ and that its set-up left the council with ‘limited control’ over its assets.
CIPFA’s review said: “The primary driver for the creation of the company was to support the development of key worker housing and regeneration across the borough.
“In practice, PropCo has never been the primary developer for these sites.
“The council has retained the land ownership and the company has effectively performed construction project management services aligned to a professional consultancy model, utilising the management fees from the development budgets to fund operations.”