Fears over high cost of council-led Newhaven housing scheme

A Newhaven councillor has raised fears about the ‘value for money’ of a £2.9million Lewes District Council housing scheme.

Friday, 13th September 2019, 3:18 pm

Speaking at a meeting of the authority’s scrutiny committee on Thursday (September 12), Newhaven North councillor Steve Saunders raised concerns about the costs of a scheme to build affordable housing in Fort Road, Newhaven.

Given planning permission in April, the scheme is expected to see 13 modular homes built on the site of a redundant office building and includes solar panels and electric car chargers as part of its design.

But Cllr Saunders, also co-leader of the council’s Independent group, says he fears the projected costs of the scheme may be rising too high and called for a review to examine what other options may be available.

He said: “Working for a developer myself, I know what the cost of building is. Spending over £3,000 per square metre is at least 50 per cent more than you normally be budgeting for.

“It is not a good way to spend £3m of the council’s budget. There are many big developments going on at the moment I think if you were to invest £3m buying those off plan, you would be spending your money more wisely than on this site.

“I have grave concerns about it. I don’t think it is the right development for that site and I think it is a really bad way of spending £3m of the council’s budget.”

Cllr Saunders said he had particular concerns about the site costing more to develop than it would be worth once built.

He also highlighted the potential for a larger and more viable scheme in future, should the adjacent Fire Authority and East Sussex County Council office building in Fort Road become available for a joint venture development.

In light of his concerns, Cllr Saunders requested a scrutiny review of the scheme with the intention of seeing if alternative proposals could lead to a better use of the site. This could include finding an alternative use for the existing building, he said.

According to council officers the approved scheme is budgeted for up to £2.9m, although is only expected to be worth around £2.7m once finished.

However, officers said the scheme is expected to make a long-term return for the council, with rental payments covering its construction costs over a 40-year period.

It would also reduce the council’s costs in the short term, officers said, as the scheme would lead to an increase in the council’s temporary accommodation places.

Despite earlier proposals, the scheme is not now expected to include temporary accommodation places itself, but will likely see council housing reallocated elsewhere instead. 

The new buildings are of a modular design, to be built off-site by a local Newhaven firm before being installed at site. This would reduce construction time, rather than cost, officers said.

Officers said much of the construction costs of the scheme came down to its small size, but also said its sustainable design – such as the solar panels and electric car chargers – and high standard of fire safety measures had an effect.

Delaying the scheme for an in-depth review could also see a rise in costs, officers said.

Despite Cllr Saunders’ concerns, most other scrutiny members were more supportive of the scheme.

Cllr Isabelle Linington (Con – Chailey, Barcome and Hamsey) said: “Unlike some of my fellow councillors, I am quite in support of this.

“I understand their concerns about the costs, but we have heard the explanation for why these small sites cost more. 

“I’m surprised that councillors aren’t supporting it more because of all the things going into the fabric of the building. 

“It is innovative, so to me the extra cost is worth it because we are getting all of these extra things in there which can demonstrate what can be done.”

While saying she thought the scheme should move ahead,  Cllr Linington did argue that a retrospective review may be helpful for similar schemes in future.

Following further discussion about the scheme, the committee opted not to launch a deeper review of the project.