Cash boost for housing project hits dead end
FINANCIAL RISK IS TOO GREAT FOR COUNCIL
A £10m cash boost to kickstart a gigantic new housing development in North Tyneside has been scrapped after the developers behind the scheme couldn’t reach an agreement.
Land at Killingworth Moor was earmarked for 2,000 new homes in the coming years, making it the second largest development site in the borough.
The cash was set to be used to fund a “significant proportion” of a new link road, running between the A1056 Killingworth Way and B1317 Killingworth Lane, to the site to unlock it for developers.
But the funding from the Government’s Housing and Infrastructure Fund (HIF) was dependent on an agreement between Homes England, the council and the consortium of developers responsible for building the houses.
However, this didn’t happen and a council briefing note stated that the developers didn’t reach an agreement.
It said: “Before HIF monies could be accepted, formal agreements between Homes England, the authority and the development consortia were required to ensure the money received achieved the council’s and the governments objectives regarding delivery of the site.
“Despite repeated requests, the development consortia have failed to enable such formal agreements to be reached and have failed to demonstrate how they intend to work together to deliver the overall masterplan.”
Because of this, the council said it “cannot credibly move forward” with the HIF funding.
The note added: “As such, the authority now cannot continue to participate in the HIF programme for Killingworth Moor.
“To do so would incur substantial financial risk to the authority as it would potentially be liable to repay the funding from the council’s own reserves. With such financial risk, the authority cannot credibly move forward with HIF.”
John Sparkes, head of regeneration at North Tyneside Council, said that despite this setback the homes and infrastructure needed to support them will still be delivered.
He added: “In 2019, the council secured £10m from Homes England to support the creation of a new link road and accelerate the delivery of 2,000 new homes at Killingworth Moor.
“This offer required a legally binding agreement to be reached by all parties setting out detailed arrangements for the delivery of infrastructure and housing; terms and conditions for the administration; and the repayment of funds.
“While the council has always been clear about these requirements, we have not been able to secure the necessary, legally binding commitments from the development consortia about site delivery and infrastructure.
“It is with regret that we cannot continue to participate in the Housing Infrastructure Fund programme without exposing the authority and our taxpayers to unacceptable financial risk.
“Killingworth Moor remains a key strategic site for North Tyneside.
“The developers continue to submit planning applications that the council as Local Planning Authority will determine in accordance with the North Tyneside Local Plan and Killingworth Moor masterplan. The masterplan sets out the key infrastructure the council expects developers to deliver to support the new development.
“We will continue to work positively and proactively with the consortia and Homes England to secure the successful delivery of the new homes, infrastructure, and green spaces required in meeting the needs of North Tyneside and its residents.”
The consortium of developers involved in the scheme declined to comment.