Council lending to developer leaps by £32m
Updated: 17 minutes ago
Something rather significant happened to the figures for the Como Street development earlier this year.
When Havering Council’s budget came before the Overview and Scrutiny Board on 4 February, which I chaired at the time, the papers showed the Council expecting to lend around £19.1 million to Mercury Land Holdings (MLH) for the Como Street development.
Just two weeks later, when the budget went to Cabinet on 18 February, the proposed lending for the same development had leapt to £51.3 million.
That is an increase of more than £32 million.
I think taxpayers deserve to know why.
From £38m to almost £66m
The change becomes even more striking when you look at the figures in full.
When the budget came before Overview and Scrutiny, the figures for Como Street were:
£19.1m in loans
£19.1m in equity
£38.2m total Council funding
Just two weeks later, the figures presented to Cabinet were:
£51.3m in loans
£14.4m in equity
£65.7m total Council funding
So the amount Havering expects to lend MLH appears to have increased by £32.2m, from £19.1m to £51.3m.
And this is not simply a case of changing the balance between loans and equity. The overall amount of Council money attached to Como Street increased by around £27.5m, from £38.2m to £65.7m.
To be clear, I am not claiming that the construction cost of Como Street suddenly increased by £27.5m or £32m. There may be changes to the financing model, tenure, timing or other assumptions behind the scheme.
But that is exactly why the business case needs proper scrutiny.
MLH needs to be in the spotlight
Mercury Land Holdings is Havering Council’s wholly owned property development company. It relies heavily on money provided by the Council to deliver its developments.
I spent years as a councillor trying to put MLH into the spotlight for exactly this reason.
The company may operate separately from the Council, but ultimately we are talking about public money. Too much of MLH’s business has been opaque and difficult for residents to follow.
If tens of millions of pounds of taxpayers’ money is being put into a development, the public deserve to understand what is happening with that money, what the risks are and what return Havering expects to receive.
A jump of this scale only reinforces that point.
I have asked councillors to call it in
Individual MLH developments are required to have their own detailed business cases, viability assessments and funding decisions.
However, those decisions can be approved under delegated authority. In simple terms, that means they do not automatically have to come before the wider body of councillors for public examination.
I have therefore written to the councillors representing the ward and asked them to support a call-in of the Como Street business case when the decision is published.
A call-in temporarily stops an executive decision from being implemented and sends it to scrutiny. Councillors can question officers publicly, examine the assumptions behind the business case and decide whether the decision should proceed or be reconsidered.
We have called in MLH lending decisions before. It is an important tool for ensuring that decisions involving large sums of public money receive the examination they deserve.
Objections need action
Some councillors have publicly objected to the Como Street proposals.
If those objections are serious, they cannot exist in words alone.
If councillors say they oppose the scheme but are not prepared to scrutinise the lending that enables MLH to deliver it, then they risk simply posturing without substance.
Calling in the business case does not mean they have to oppose the final decision. It means putting the evidence on the table, asking questions and making sure the financial case can withstand public scrutiny.
I have never argued that Como Street Car Park should remain untouched forever.
Indeed, I have spent years engaging with MLH and pushing for improvements to the proposals. That engagement has helped contribute to a significant reduction in the proposed height of the development and changes intended to reduce the impact on neighbouring residents.
I am not a NIMBY. I believe in suitable development, and politicians should be honest with residents rather than pretending every development can simply be stopped.
But a development must be right for the area, it must be financially viable and it must represent a sensible use of taxpayers’ money.
Before Havering potentially lends £51.3 million, with total Council funding for the scheme now approaching £66 million, councillors should be willing to ask some difficult questions.
More than £200m tied up in MLH
The previous HRA Cabinet approved a budget of more than £200 million for Council money to be put into Mercury Land Holdings, much of it through loans to fund its developments.
The latest capital programme shows around £223 million allocated across MLH schemes. With sums of this scale involved, councillors have a responsibility to make sure individual investments stack up and that taxpayers can see where their money is going.
Will Reform, and their new councillors, continue the scrutiny of MLH?
MLH capital programme, presented to Cabinet 18 February 2026
Development | Prior years | 2026/27 | 2027/28 | 2028/29 | 2029/30 | 2030/31 | Total |
Quarles | £7.484m | £9.054m | £0.506m | £0 | £0 | £0 | £17.044m |
Reactive Acquisition Fund | £2.794m | -£2.794m | £0 | £9.060m | £9.615m | £0.525m | £19.200m |
Priory Way | £1.678m | £1.608m | £0 | £0 | £0 | £0 | £3.286m |
Peel Way | £1.261m | £1.793m | £0.193m | £0 | £0 | £0 | £3.246m |
Albert Road | £2.081m | £2.551m | £0.495m | £0 | £0 | £0 | £5.127m |
Como Street | £3.783m | £0.016m | £14.421m | £18.578m | £28.464m | £0.408m | £65.670m |
Keswick | £1.268m | £1.865m | £0.542m | £0 | £0 | £0 | £3.675m |
Dorrington | £4.091m | £5.833m | £3.423m | £0 | £0 | £0 | £13.347m |
Angel | £7.209m | £0.010m | £12.588m | £15.955m | £4.727m | £0.036m | £40.525m |
Disposal C | £0 | £0.035m | £0 | £12.000m | £13.214m | £19.950m | £45.199m |
Contingency | £0 | £3.000m | £4.000m | £0 | £0 | £0 | £7.000m |
MLH total | £31.648m | £22.970m | £36.169m | £55.592m | £56.020m | £20.918m | £223.319m |
The Evidence
Full meeting agendas:
4th February, go to page 411
18th February, go to page 33
Screenshots:
4th February
18th February
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