Norfolk County Council's oversight of Norse questioned

Norse Group, set up and owned by Conservative-controlled County Hall, built the plant off Buxton Road in Marsham in 2010.

The compost plant at Marsham (Image: Denise Bradley)

But within three years it stopped processing food waste after hundreds of complaints about the smell. It had stopped dealing with garden waste by 2021.

Norse still rents the land the plant was built on, with a lease until 2035, with no early cut-off.

So, it was costing Norse £125,000 a year in rent and other outgoings, even though the plant was not being used.

Last December, Norse said a sub-lease agreement had been signed for another tenant to move in, which would reduce losses.

But it has emerged that, while a tenant has been in occupation since that time, the sub-lease has yet to be signed.

Under the spotlight

A number of questions about Norse - and the level of scrutiny by the Conservative-controlled council of its own arms-length company - were tabled at recent meetings of Norfolk County Council.

Tom McCabe (Image: Supplied)

The council's chief executive Tom McCabe, in correspondence with John Martin, a retired solicitor who posed some of those questions, said it was "clear" Norse recognised the Marsham investment had not been "good" and caused "a loss to the company".

He said he was "surprised and disappointed" the sub-lease had yet to be signed and that he intended to write to Justin Galliford, the chief executive of Norse, who is paid £230,000 a year.

Justin Galliford, chief executive of Norse (Image: Norse Group)

A Norse spokesman subsequently said a tenant had been occupying the site since December last year - and had been paying rent.

But they said, because the formal sub-lease had yet to be signed, it could not name the tenant or state how much had been paid since last December, for "commercial reasons".

Claims over trading losses

Norse confirmed it has loans of £25m, including £14m from the county council.

But officials rejected the contention, made in recent council meetings, that it has made £27m in trading losses after the past three years.

Questions about Norse have been asked at Norfolk County Council meetings (Image: Mike Page)

The company's own accounts state a loss of £13.7m in 2021/22, £5.8m in 2022/23 and £7.3m in 2023/24.

But Norse said that conflated balance sheet adjustments with trading performance.

The company said it made £27m in that period in earnings before interest, tax, depreciation and amortisation (EBITDA) of assets.

The company said: "We can confirm that Norse has not made trading losses, which would be defined as EBITDA, over the last three years.

"The statutory accounts include several write-downs, along with high depreciation charges, which are non-cash and not included in trading profit."

What does Norse do?

Norse Group was formed in 2006 as the holding company for Norse Commercial Services and NPS Property Services, which County Hall had established in 2002.

Its work includes waste management, maintaining and managing the county's roads and, through Norse Care, running residential homes and housing with care schemes in Norfolk.

READ MORE: Anger as Burman House care home faces closure within weeks

The group also provides services for other councils and organisations across the country and said it had paid £7.7m in trading rebates to the county council in the past three years.

Questions about the council's oversight of Norse

Green county councillor Jamie Osborn (Image: Denise Bradley, Newsquest)

Green county councillor Jamie Osborn asked, at a recent meeting of the council's cabinet, whether governance arrangements for Norse comply with government guidance for council-owned arms-length companies.

Andrew Jamieson, cabinet member for finance, said the council had a companies governance panel to oversee and challenge its companies.

But he acknowledged the council's own guidance over its approach to local authority companies was still a work in progress.

Andrew Jamieson, cabinet member for finance at Norfolk County Council (Image: Newsquest)

He added: "Assurance about the governance in place for Norse has been obtained through the reports received by their internal auditors and a signed group annual assurance statement."

He said no concerns had been identified.

Norse Group's board of directors includes Andy Wood, a non-executive director appointed by the county council, plus county councillor Greg Peck.

Dan Roper, chairman of Norfolk County Council's scrutiny committee (Image: Dan Roper)

Dan Roper, Liberal Democrat chairman of the council's cross-party scrutiny committee, said a meeting in the new year would look in depth at the activities of Norse.