By Sebastian O’Kelly
Has South Somerset council twigged that it can make a fortune out of residents in private estates by playing the ‘fleecehold’ game?
It has set up a company called Elleston for “landscaping and horticultural work” which it hopes will make £2.2 million a year in two year’s time.
Thousands of private estates have roads, pavements and lighting that have not been adopted by the council, so the residents have to pay for them.
On top of their council tax, that is.
Developers and councils have immediately seen the advantage of this: councils save money by not doing the job that they have to do in the rest of the borough; developers have created yet another investment asset class – the management contracts – that can be traded on.
Everyone’s a winner, except the duped house buyers who did not understand the wealth-eroding nature of the management contract.
These are now traded assets, with Green Belt in Glasgow having companies worth around £200. FirstPort, the largest block manager in the country, has also hoovered up a few.
It is not clear to LKP whether South Somerset is naive or mercenary.
LibDem councillor John Clark welcomes the initiative:
“When new estates are built, developers have a choice of seeking adoption of the common public areas by the council or retaining ownership and utilising a private maintenance company.
“With many developers now choosing to take the private maintenance company route [now, why would they prefer that, do you wonder?] and charging residents for the costs, Elleston will utilise our skilled workforce and good practice to ensure that an excellent level of work is carried out.
“The council cannot use public money to maintain private land, therefore Elleston is simply meeting the market need.”
Meeting the market need? Many victims of the ‘fleecehold’ game would say that is a polite way of describing the avoiding of your responsibilities.
South Somerset has set up a new landscaping and horticultural trading company called Elleston which aims to provide a better service for residents, while returning profits to the Council. Elleston has been created by SSDC in response to requests from residents as well as housing developers as there is a demand for high quality maintenance work on private developments and estate land.
No one seems to be asking, why should buyers of new homes – usually for first-timers – have to pay for services which all the other residents in a borough don’t pay for?
In last week’s email dump to chief executives, around 30 outraged letters came from residents in Agusta Park, where Persimmon has been happily dumping first-time buyers into scandalous leasehold houses.
What’s the betting Agusta Park also has a management company because its roads, drains and lighting are not adopted?
It is utterly ludicrous that taxpayers are lavishly funding through Help To Buy multi-million pound bonuses for Persimmon’s executives … and a cushy income stream for the credulous and indolent South Somerset council.