The future of a council-owned housing company accommodating dozens of homeless families is at risk, a report to council leaders suggests.

James Elliman Homes – which is wholly owned by Slough Borough Council – has failed to turn a profit or manage its homes and finances properly, the report has revealed.

But it also says the company has played a ‘valuable’ role in housing homeless people, and that evicting current tenants could prove difficult.

Now the council is preparing to ‘consider the role and case for continuing’ with the company – with the alternative being to shut it down.

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Slough Borough Council set up James Elliman Homes in 2017 to provide affordable homes available to key workers in the borough.

Yet in its first years the company instead housed at least 121 families at risk of homelessness who the council have had to provide temporary accommodation. That meant the income from rent that the company made was less than planned.

Of the 168 properties James Elliman Homes owns, 130 house tenants placed there by Slough Borough Council under its homelessness duty.

The properties are a mixture of second hand homes and newbuilds. But the council report says many of them ‘were or are in poor condition’. It also says James Elliman Homes has not been able to make sure ‘properties are managed to a decent standard and rent arrears and voids are managed’. That’s because although it’s a company in its own right it employs no staff itself, using council staff instead.

The report says: “Historically management of the properties has been poor with tenants being allowed to build up very large levels of rent arrears.”

James Elliman Homes also doesn’t have a ‘fully functioning’ management board, which has led it to submit its accounts late two years running – putting it at risk of being struck off both times.

Accounts show that James Elliman Homes has consistently operated at a loss since at least 2020. That means it may not be able to repay some £51.7 million that the council loaned it to help it buy its properties

The report suggests that James Elliman Homes could repay the loan by the 2028 deadline if it sold all of its properties at market value. But it says this is ‘only one option on deciding the future strategy of the company’.

However the council also says that if James Elliman Homes closed, it could be difficult to evict its tenants, who are protected by tenancy agreements.

The report says the company has ‘clearly provided a valuable route’ for housing homeless people needing temporary accommodation.

It says that if managed properly the company ‘could be a useful resource in reducing homelessness costs’.

James Elliman Homes now has to provide a business case to the council, to be presented to council leaders in November this year.

Leading cabinet councillors on its asset disposals committee are set to discuss and note the report at a meeting on Thursday, September 12.