SE Cambs Labour asks: How many more times will the public purse be asked to bail out developers in South Cambs? We’re worried that South Cambs District Council doesn’t actually know the answer to this question.
Elizabeth McWilliams, local democracy spokesperson for SE Cambs Labour said
“South Cambs asked Greater Cambridge Partnership for £20m to help fund moving Waterbeach railway station to the New Town. Plus a £17m loan for the money the developer is contributing.
“And South Cambs District Council is taking £12.85m from its capital reserves for community facilities in Northstowe.
“In both cases the developers agreed to provide the infrastructure. In both cases the developers now say they can’t afford to build the infrastructure they promised. This is what is politely known as a ‘funding gap’.
“This is not the same as when local or national Government decides in advance to invest in infrastructure to support development. It’s the complete opposite.
“I am very concerned about the fact that taxpayers are now bailing out the developers. And worried that there may be other projects where developers will be holding out their hands for public money.
“That’s why I posed a question to the Lib Dem leadership at this week’s South Cambs Council Cabinet meeting.
“I asked about risk assessments they’d carried out to see if there are other ‘funding gaps’ about to come forward for public subsidy. I know if I were in charge of planning, I’d want to check what other risks are lurking in development projects.
“From the way that Cllr Hawkins responded, I don’t think any such risk assessment has been done. This is extremely worrying as we are talking about substantial sums of public money here. Money that is meant to be for greatly needed projects elsewhere.”
Elisa Meschini, chair of the Greater Cambridge Partnership added
“In no known universe should it be allowable under planning law that the taxpayer is called upon to subsidise the profits of a developer up to a margin of 20%. That’s what the viability test means – that the developer profit might fall below 20%!
“And in no known universe should it be allowable, again under planning, that the developer can lay claim to a further £17m of taxpayers’ money in what is essentially an interest free loan.
“And it’s not just this significant amount of money that the developer is claiming, they have also had the affordable housing requirement cut by 25% on the grounds that they might not make enough profit otherwise.
“South Cambs District Council gave planning permission to the developer for phase 2 of Waterbeach New Town. I wonder whether permission would have been given under these circumstances.”