Two companies owned by council ‘in strong position’ despite initial losses
PUBLISHED: 09:00 01 December 2019
Two companies owned by a Suffolk council which posted losses in last year’s accounts will not need propping up by taxpayer funds – and should soon be posting profits, the authority has said.
Ipswich Borough Council owns Ipserv - a firm which carries out services such as parking enforcement and cleaning on behalf of the authority.
Its accounts for the year ending March 2019 revealed a pre-tax loss of £574,819, with the accompanying report stating that the shareholder "will provide financial support for a period at least until 31st March 2020".
The accounts also said that it bought a company called Stage Event Security Ltd in 2018, which suffered a pre-tax loss of £133,477 at the end of the last financial year.
But finance chiefs at the council said that both companies were performing much better, and neither would need any funding from taxpayers or Ipswich Borough Council.
Colin Kreidewolf, Ipserv chairman, said: "These accounts are for last year (2018/2019) and the current financial position is very positive.
"By next March, the accounts for 2019/2020 will show us in profit.
You may also want to watch:
"When you consider that Ipserv is only in its third year of trading that is a very strong position to be in.
"Stage Event Security have secured important new contracts since they were acquired and are growing strongly with turnover up 150%.
"This should mean the company is in profit by 2020/2021."
The current financial year ends in March 2020.
It is understood that part of the costs involved in the Stage Event Security takeover were around staffing, as the council moved to a living wage pay system in line with its other staff.
Private firms are not obliged to pay a living wage in the same way that local authorities are encouraged to do.
The accounts for the council's housing firm, Handford Homes, showed a pre-tax loss of £66,461 last year, but its investment arm Ipswich Borough Assets performed better with a £15million profit for the year before tax.
Gathering income from investments is a common strategy councils across the country employ as it enables them to utilise income to protect frontline services without hiking up taxes.
If you value what this story gives you, please consider supporting the Ipswich Star. Click the link in the yellow box below for details.