Four councils in Essex have set up an arms-length company that could see them borrow around £480m to develop new ‘garden communities’.
The company, known as North Essex Garden Communities Ltd, will in turn establish a local delivery vehicle (LDV) for each of three new garden towns, which aim to deliver up to 35,000 homes over 30 years.
It is owned by the four councils and will initially be chaired by Cllr John Spence, Essex County Council’s cabinet member for finance, housing and planning.
The councils – Essex, Braintree and Tendring district councils and Colchester Borough Council – are likely to provide some or all of the money required by the LDVs through their own borrowing.
According to a report to Essex councillors, the peak debt for the councils if they are the only funders would total £480m, with Essex borrowing £185m.
The next highest level of borrowing would be Braintree, with £145m, followed by Colchester at £110m and Tendring at £40m.
A spokesperson for Essex council confirmed that the figure of £480m is the best estimate of what would be needed to fund infrastructure.
He told Transport Network: ‘As the project moves forward the company will create three LDVs (Assuming all three continue to progress as they are determined by each council’s local plan process, and by the ongoing landowner discussions).
‘They will be independent legal bodies responsible for determining their own business plans and setting out funding requirements and timescales.’
The first-tier councils have identified the potential for major new developments in the form of new ‘garden communities’ in their respective Local Plans as a means of meeting future growth requirements.
According to the report to councillors, ‘all four councils are thinking strategically, are not being restricted by current local plan making time horizons and are considering whether Garden Communities could address some of this long-term need both within the plan period and beyond’.
The councils have been asked to give in principle agreement to provide funding ‘to pay for delivery of the infrastructure in a more timely and co-ordinated way than can be achieved with a traditional development’.