Council expecting £4.8m loss from housing project

A council that turned over its headquarters to be redeveloped for housing has predicted it could lose millions on the scheme as it nears completion.

Babergh District Council's offices, in Hadleigh, Suffolk, have been turned into residential properties, and new homes have been built on the site after staff relocated to Ipswich 10 years ago.

Babergh Growth Limited - a private joint-venture property development firm - has carried out the work after receiving a loan of £13.7m from the local authority.

A report presented to the council said it was expecting about £4.8m not to be paid back due to increased construction and delivery costs and changes in the housing market.

It said the full financial implications would become apparent later in the financial year, by which time 29 unsold properties, out of a total of 49, were expected to have found a buyer.

Despite the anticipated loss, the authority said the development had delivered wider regeneration benefits.

It claimed the scheme would "transform a previously under-utilised area, provide new high-quality homes, enhance the local environment and support the longer-term economic and social vitality of the community", according to the Local Democracy Reporting Service.

The council had not expected to turn a profit on the Cork Lane project and that had been reflected in its books in recent years, the local authority added.

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