Telford & Wrekin Council needs to borrow extra £800,000 for gipsy site

The project to build 12 units at the site off Lodge Road in Donnington Wood is running £775,000 over budget, according to a report due to be discussed at a meeting of Telford & Wrekin Council on Thursday.

The authority had netted £1.75 million in Government funding from the Homes & Communities Agency to pay for the work – and it had been anticipated it would cover the whole scheme.

Bosses have blamed poor quality ground conditions for the slippage, as well as the need to build the new units to a "higher than anticipated specification" under the agreement with the HCA.

In the report Kate Callis, the council's assistant director for development, business and employment, says the £1.75 million from the HCA will be lost for good if it is not utilised by March next year.

She also claims failure to deliver the project will lead to more illegal encampments across the borough.

She says: "In July 2013, cabinet approved the acquisition of three acres of land off Lodge Road, Donnington Wood, to facilitate the extension of the existing permanent gipsy and traveller site to accommodate a further 12 units.

"The extension to the site was considered essential to ensure that the council is able to fulfil its statutory duty towards a gipsy and traveller family within the borough who have residential rights here, but are currently being accommodated on a transit site at Snedshill.

"Officers have been developing the scheme for the extension to the Lodge Road site but abnormal costs of development have arisen as a direct result of the poor quality ground conditions as well as the stringent requirements placed on the specification of the accommodation provided, which is a condition of the HCA funding agreement. Despite considerable work being undertaken to reduce costs, the scheme remains circa £775,000 over budget.

"Failure to secure a deliverable scheme will mean that the HCA funding will be lost. Costs incurred to date, amounting to £60,000, will be abortive.

"The likelihood of securing future HCA funding will be significantly reduced, meaning the council will have to fund an accommodation solution in full.

"We will see an increase in the number of illegal encampments within the borough with the associated costs and reputational damage.

"The number of illegal encampments has significantly reduced from on average 22 per year on council land to almost nil since the Snedshill site was brought into use.

"The borrowing will ultimately be repaid utilising the capital receipt from the sale of the Snedshill site in 2019."

Councillors will be asked to approve the borrowing at the meeting on Thursday, which will start at 6.30pm at the Haybridge Restaurant at Telford College of Arts and Technology.