£254m council housing scheme under threat in Birmingham
Jul 22 2010 by Jonathan Walker, Birmingham Post
An ambitious £254 million building scheme to create 262 new council homes and improve hundreds more in Birmingham could be threatened by Government cuts, MPs have claimed.
Birmingham City Council will consider whether to press ahead with the huge Erdington construction project at a Cabinet meeting on Monday.
But while councillors are expected to approve the project, they will then need permission from the Government to carry out the building work, which involves taking out a £100 million “mortgage” through a Private Finance Initiative.
A number of West Midlands housing schemes have already been hit by funding cuts. Dudley Council has been told a planned grant of £5.5 million to subsidise the building of 81 homes has been put on hold and public subsidies for private housing projects in the region have been cancelled.
John Healey, Labour’s shadow Housing Minister, was due to visit the site of the proposed project in Erdington today (Thursday) to push the case for approving it.
Birmingham City Council wants to transform housing at the Lyndhurst estate and Pitts Farm estate in Erdington. The scheme also involves developing the Court Lane allotment site nearby.
It plans to build 262 new council homes, and the developer will build another 297 private-owned homed as part of the deal with the council.
A further 337 council houses on the Lyndhurst estate will be improved, and 176 council flats will be converted into 88 council houses.
The developer chosen to carry out the work will also carry out maintenance and repairs for the 25-year duration of the contract.
But Birmingham City Council needs the Government’s permission to agree the deal, which involves borrowing a £103 million through the Private Finance Initiative, to be paid back over 25 years.
The authority predicts the project will eventually cost it £254 million.
Local MP Jack Dromey (Lab Erdington) said: “Pitts Farm has been remarkable progress but there remains too many run-down houses and unfit homes that local people get offered to rent or buy.
“Government must give the go-ahead for what will be good news for local residents and create jobs and apprenticeships in Birmingham.”
He said he “doesn’t often agree” with the Conservative and Liberal Democrat-led city council but in this case he backed the council and wanted the Government to support it.
Mr Healey said: “As well as visiting the site I will be meeting Labour councillors to discuss housing concerns in the city.”
