East Cambs District Council want to borrow £24m from combined authority to buy and modernise 88 homes in Ely owned by RAF and once used to house USAF families

PUBLISHED: 17:28 25 November 2018 | UPDATED: 17:28 25 November 2018

88 homes in Ely owned by the Ministry of Defence and once used by USAF service familes could be bought and modernised by East Cambs District Council. Picture: ARCHANT and MOD

88 homes in Ely owned by the Ministry of Defence and once used by USAF service familes could be bought and modernised by East Cambs District Council. Picture: ARCHANT and MOD

Archant

Eighty eight homes in Ely – owned by the RAF but more recently used to house American service families – could be snapped up by East Cambridgeshire District Council.

88 homes in Ely owned by the Ministry of Defence and once used by USAF service familes could be bought and modernised by East Cambs District Council. Picture: ARCHANT and MOD 88 homes in Ely owned by the Ministry of Defence and once used by USAF service familes could be bought and modernised by East Cambs District Council. Picture: ARCHANT and MOD

Under a deal being considered this week the Cambridgeshire and Peterborough Combined Authority will offer a two year loan to the council – capped at £24.4million – to buy the houses and modernise them.

Fifteen of the homes, once done up, will be designated affordable and run by a community land trust to help local families.

The council believes that if the site is sold to a private developer there will be incentive or requirement to offer any as affordable homes for local people.

The site is not named specifically in the report to the combined authority board – an omission criticised by board member, Councillor Lewis Herbert, leader of Cambridge City Council.

He believes there is “no proper reason” for the site name being kept secret and he feels the principles and justification for the loan need to be fully in the public arena.

Cllr Herbert says he will be asking why the combined authority is “using scarce combined authority affordable housing funding – a quarter of the £100m fund which was supposed to deliver 2000 plus affordable homes including for rent”.

He is also questioning whether it breaches the devolution deal for the county.

“What is now proposed is an out and out investment project not really a housing one, though it will have benefits as they have been empty for a couple of years,” he said.

A year ago the US air force announced they would be returning all 88 homes to the RAF “in an effort to reduce excess infrastructure capacity”.

If the deal is agreed it will mean the houses being sold to the council’s trading arm; a proposed refurbishment plan will see four of the houses divided to create a total of 92 homes.

A report to the combined authority says: “The units have been unoccupied for a number of years.

“Through this transaction they will rapidly be returned to the market for the benefit of local families.

“Providing the loan will enable 15 of the units to become affordable units for the benefit of a local community land trust, without any grant being required.”

The report adds: “If the site was purchased by private developers, they will have no obligation to supply any affordable housing.”

The combined authority is also being invited to enter into a future “joint venture” with the council to use other land on the site for a further 62 homes.

A confidential appendix includes the strategy, valuation, market report, pricing schedule, development appraisal and cash flow.

The report says: “It is projected that by year end March 2020 re-payments will have reduced the loan to £18,140,000 and the loan repaid in full by year end March 2021.”

The combined authority is being offered a tempting inducement of a 50 per cent share of the profit up to a maximum of £1.5 million.

In the event of any profit in excess of £1.5m, the combined authority will get 30 per cent of any additional profit achieved.

Cllr Herbert remains unhappy over the half year combined authority budget reports and alleges financial management during 2018 “has been woefully inadequate”.

He says this is “particularly on uncontrolled staffing and overhead budgets and unreported delegated spending decisions, totalling a projected £7.6mmillion spend this year, over three times the original February budget.

“Every £1 of unnecessary operating costs overspent is £1 lost from the new rail, road and housing projects that we need so badly, and efficiency measures are essential to significantly increase funding for infrastructure investment over the next four years.”

He said the evidence supports the call made by both him and the leader of South Cambs District Council, Councillor Bridget Smith at the board meeting in September for a full financial audit.

“We need an urgent programme of major overhead cuts, an end to delegated spending approvals that go unreported, and to extras like running two offices about 30 miles apart when only one is needed.

“Together with Councillor Smith, we will ask again at the combined authority board on Wednesday for that audit and a demanding programme of efficiency measures, and to start making savings now.”

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