Homes England is set to receive just 0.1 per cent of the £69m it is owed by Ilke Homes, after the firm’s administration process was hit by equipment theft and problems selling completed modules.
The collapsed modular homebuilder owes £321m to its creditors, including £68.7m to Homes England – but the current payout to the taxpayer-funded homes agency is estimated to be £82,000.
Ilke also owes £725,000 to its employees, £2.2m to HMRC and £249.3m to unsecured creditors. None of them will receive anything.
Administrators from AlixPartners applied to the court to place Ilke into liquidation in September after it became clear that they could recover “significantly less value… than originally anticipated.”
This was in part due to a break-in at Ilke’s Flaxby Moor factory in Yorkshire in August, when equipment that had been sold at auction two days earlier was stolen.
On 19 August, 40 people cut through several secured gates and entered the site with at least 14 vehicles, including caravans and vans, according to North Yorkshire Police.
The group refused to leave until the early hours of 21 August, despite the presence of onsite security, police and the auctioneers, Hilco Valuation Services.
North Yorkshire Police confirmed that a “large amount” of equipment worth thousands of pounds was reported stolen. Onsite security was unable to find any of the missing equipment while searching the vehicles.
The administrators were also unable to sell 300 completed modules in storage. The original customers were unwilling to buy the modules as they would not be able to finalise the homes without access to manuals that were stored electronically and unable to be accessed. Because the modules were designed for each customer in terms of specification and foundations to be installed on, it was not possible to find other buyers.
Furthermore, a third-party supplier claimed title over the modules and some of the associated intellectual property.
The money returned to Homes England came from the sale of a high-speed assembly line at the August auction for £188,000.
Ilke Homes was established in Knaresborough, Yorkshire, in 2018. It entered administration in June, immediately making 1,039 of its 1,061 staff redundant.
In May and June, 36 businesses were approached about buying the troubled housebuilder. One bid was received for £25m, according to the administrators’ previous reports, but the deal broke down.
A spokesperson for Homes England said: “A core part of our remit is to support the creation of a more resilient, diverse and innovative housing sector, and investing in MMC [modern methods of construction] is an important part of that.
“There is always an inherent risk when investing in new technologies with new business models that look to do things differently, but we remain committed to encouraging greater use of MMC, supporting its growth, and diversifying the housing market.”