COUNCILLORS have questioned the financial viability of a a £26million scheme to create 82 affordable homes in former council offices reports the Local Democracy Reporting Scheme.
The newly built civic offices allows the neighbouring vacant council office building in Grays to be converted into 82 flats.
However, councillors on the housing overview and scrutiny committee which met this month, said margins of profitability were too tight.
Chairman, Lynn Worrall said: “Looking at the build costs, to break even we’ve got a small surplus that doesn’t allow for anything to go wrong with the money, £1,095 per flat per year if we don’t overspend and if we don’t have to put in any more money. There’s not a lot of wriggle room. It’s quite worrying.
“I spoke to a builder in Tilbury and he said building costs had gone up by a third already. We’re going to make £92,000 per annum as long as we don’t have any slippage and nothing goes wrong.”
Ms Worrall said all avenues had been explored to fund the project and private investors “don’t want to touch it”. Consequently the council will carry out the build with funding from the housing revenue account.
She added: “I am worried that we are walking into something here. When I look at financial viability we’ve got loads of words like, challenging, tightly constrained, this may happen, demolition is complex.There’s a lot of big buts and maybes in this with not a lot of wriggle room. I’m not a betting person but I wouldn’t put my money on this coming in.
“I’m quite concerned about the amount of money. Everything is not rosy out there. We’re going to be up against it for building costs. There’s a worldwide shortage that will shoot building costs up and we need to be honest.”
Ms Worrall said the money could be better spent elsewhere. She said: “Yes I do want housing. Yes we are desperate for housing. This isn’t even going to touch the waiting list. We’ve got thousands sitting on there and we’ve got sites in the pipeline that we could be using twenty odd million pounds and we could be building beautiful stuff elsewhere.”
