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Garden Communities: “Value for money – but we must learn from experience”

NEGC funding discussed by Scrutiny Panel

Date issued: 18 August 2020

Colchester Borough Council’s expenditure on the project to deliver three new garden communities in North Essex was the main subject of discussion, when the Scrutiny Panel met last night (17 August 2020).
 
Deputy Chair, Cllr Lewis Barber, had requested the Panel receive a report detailing financial accounts and costings relating to Colchester Borough Council’s involvement in the joint project to deliver three new garden communities in North Essex.
 
Included in the report, among other information, were financial and contractual details relating to Colchester Borough Council’s role as banker for the project, figures confirming the total winding up costs of North Essex Garden Communities Ltd – the company set up in partnership with Tendring District Council, Braintree District Council and Essex County Council – and the anticipated reserves balance to be distributed to its shareholder-partners at liquidation.
 
Panel members were asked to consider the report and make any appropriate recommendations to Cabinet. The report detailed the council’s contributions to both the North Essex Garden Communities project and NEGC Ltd – noting that most of the council’s funding contributions have been to the project. Panel members expressed their concern at the challenges for scrutiny of such a complex project. They agreed on the importance of continued transparency, overspend and Colchester's contributions and recovery of cost, and asked Cabinet to consider recommending to the other partners, including the Government, an independent audit or peer review. 
 
Speaking after the meeting, Cllr David King, Portfolio Holder for Business and Resources, said: “I’m glad the Panel has had an opportunity to look afresh at the project. It has been a huge challenge for all the parties involved, as well as the Government. We have broken new ground together in testing planning policy and how the viability of garden communities can be demonstrated and delivered. We agree on wanting better development, but it has been a tough process and we have secured only one garden community not the three proposed.

“Done well, it still means thousands of high-quality homes, sustainable transport and infrastructure and a better quality of life for residents, and it is clear value for money. Colchester contributed just 12% of the funding but received 100% of the benefit – attracting government funding of nearly £100 million for the A133/A120 link road and a Rapid Transit system into Colchester. Plus, the plans for the garden community itself, worth over £2bn, that will help provide the sustainable high-quality housing and new jobs that our part of Essex desperately needs. This is a huge return on investment. 

“But as the Panel discussions confirmed, we know the project has divided opinion and raised questions about spend, delivery, process and effectiveness. So, we welcome the opportunity to look again, to work with partners (if they agree) and to take and share any lessons we can learn.” 
 
In May, this year, a government-appointed Planning Inspector said the financial viability of the proposed Tendring/Colchester Borders Garden Community is very strong but, in his opinion, the proposed Colchester/Braintree Borders Garden Community and the proposed West of Braintree Garden Community are not deliverable and should be removed from the joint section one Local Plan.
 
As NEGC Ltd was established to oversee the development of proposals for the three garden communities, the decision by the Planning Inspector means discussions to potentially wind up the company in its current form have been brought forward, to enable new arrangements to be put in place to deliver the remaining Tendring/Colchester Border garden community that looks set to become established.
 
Download the Scrutiny Panel report here.
 
Watch a recording of the 17 August meeting here
 
The £8M project received £1m (1/8th) funding from each local authority, with the Government funding the £4m balance.
 

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