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Costs increase by nearly £700,000 for plans to develop redundant council offices in Corks Lane Hadleigh into homes



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Costs have increased by nearly £700,000 for plans to develop redundant council offices in Hadleigh into homes, it has emerged.

Babergh District Council chiefs are next week set to increase the debt threshold for its holding company in order for work to begin later this summer.

But opposition councillors say the authority should consider whether it can get a good deal from selling the site.

A CGI image of what the 57-home development of the former council offices in Corks Lane, Hadleigh, could look like. Picture: BABERGH DISTRICT COUNCIL
A CGI image of what the 57-home development of the former council offices in Corks Lane, Hadleigh, could look like. Picture: BABERGH DISTRICT COUNCIL

The council secured planning committee backing to turn its old Corks Lane offices into 57 homes back in March 2019, after moving to a shared base at Ipswich’s Endeavour House.

The final planning permission was only secured in March 2021 as a result of several delays, including negotiations with the neighbouring cricket club, but a condition means work must start by September this year.

However a report to the council’s rainbow cabinet has confirmed that increasing costs in the construction market, and impacts from Brexit, the war in Ukraine and inflation has caused the cost of the scheme to go up by £680,000.

John Ward, Conservative leader at Babergh District Council. Picture: BABERGH DISTRICT COUNCIL
John Ward, Conservative leader at Babergh District Council. Picture: BABERGH DISTRICT COUNCIL

The council said it had measures in place to mitigate that, but needs cabinet’s approval next week to increase the debt threshold of its holding company, Babergh Growth Ltd, from £3.7million to £7m to facilitate the necessary cashflow.

It said that without the change it would exceed its £3.7m limit which means contractors would not be able to begin on site and the planning permission will expire.

Cllr John Ward, Independent Conservative leader of the council, said: “We are as keen as anyone for work to begin on this site. The redevelopment of our former council offices into 57 new homes represents a major investment for Hadleigh, but it was important that we also took the time required to find the best possible solution for the local community and neighbouring cricket club.

“However, we now find ourselves in a particularly challenging period of rapidly increasing costs, supply chain issues and uncertainty within the construction industry, due to a combination of factors – including Brexit, the pandemic, and the war in Ukraine.

“This is not about a bill for the taxpayer increasing by millions – this is purely to do with cashflow during the phasing of the project and the governance around the amount Babergh Growth Ltd can borrow to deliver it.

“Ultimately, the development is still expected to break-even or even show a modest profit for the council, with new homes and investment for Hadleigh – but only if we can release the cap to borrowing that was imposed, based on cost estimates and phasing from four years ago.”

But the opposition Conservative group has raised concerns about the scheme and said the council should consider selling the site. It said the £500,000 valuation for the site was “not credible” and hadn’t been tested in the open market.

Councillor Simon Barrett, Conservative cabinet member for finance and ward member for Great Cornard. Picture: BABERGH DISTRICT COUNCIL
Councillor Simon Barrett, Conservative cabinet member for finance and ward member for Great Cornard. Picture: BABERGH DISTRICT COUNCIL

Conservative group leader Simon Barrett said: “We are concerned they want to up the borrowing requirement from £3.7m to £7m, which is worrying because the whole project is very marginal whether it makes any money.

“It values the site at £500,000 which is ridiculous.

“We would suggest that it would be better to put it up for sale in the open market and see what bids we get.

“If they don’t achieve what they want we don’t have to sell it but then you are not committing to serious amounts of debt.”

Cllr Barrett said a bid of even a few million pounds would be better than the potential debt, and such a marginal profit could easily become a loss.

The rainbow cabinet, comprising Independent Conservatives, Independents, Liberal Democrat and Green councillors, is set to decide whether to increase the debt threshold at its meeting on Wednesday next week.