Council's housing plan 'will offset cuts'

The plans will offer a new way for local people to live in the borough, councillors claimed at a meeting last night.

Telford & Wrekin Council wants to borrow £45.7 million and set up a company to build and rent out around 425 homes.

The authority would lend the cash to the landlord company to build 425 homes on council-owned brownfield land valued at £6.775 m.

And the council would invest £6.1m to build shops, bars and restaurants at Southwater, where more than 100 apartments would be sited, and at Madeley Court , where there would be 50 homes.

Telford & Wrekin would borrow £45.7m from the Public Works Loan Board, to be repaid at a commercial rate of interest.

The company would act as a residential landlord overseeing the homes that are built and managing them once complete.

Through this scheme, cabinet member for finance Councillor Bill McClements explained, the council could potentially make £51 million in income while having £104 million in assets over the next 30 years – helping to pay for services which have been affected by reductions in funding.

Mr McClements said: "This is likely to be higher as it is quite a cautious estimate.

"This is an example of good borrowing."

The scheme would see Telford & Wrekin become one of the first councils in the country to set up its own housing company.

The new homes in Southwater, Hollinswood, Randlay, Madeley, Newport, Malinslee and Woodside would be rented to private tenants at market rates with 20 per cent of the homes being affordable rent.

At Madeley Court, 50 homes, two supermarkets and a restaurant are planned and another 101 homes would be built on the former Woodland Primary School in Woodside.

Mr McClements said that these were all council owned brownfield sites were development has stalled.

The decision to borrow the money comes after members approved a scheme to borrow up to £120m from Government to be able to offer the MOD Donnington site as a major logistics hub

Councillor Kuldip Sahota, leader of Telford & Wrekin Council, said: "If MOD Donnington is our biggest financial investment, this is the second biggest.

"We have lost £56 million of Government funding over the last three years.

"The Government says we need to find new ways of raising money and that is what we are trying to do and we are getting on with it."

Councillor Andrew Eade, who leads the opposition Conservative group, said he wanted to be able to look into the proposals further before making a decision on borrowing.

He claimed if these plans go ahead, along with MOD Donnington, the council's total borrowing will be £300 million.

He said: "That is a huge amount of money and a substantial risk."

The borrowing requirement will now go to full council for final approval later this month.

Councillor Paul Watling said: "This is innovative thinking about the future of all of our services.

"One of the main problems my constituents come to me is about the problems their children are having to get into the housing market.

"This is an innovative way of offering families a way to live in Telford in affordable housing.

"Though they won't be social housing, they will be more affordable for people than trying to pay mortgage rates.

"They will be rented through a landlord who can be trusted and who will be good landlord."