Council reaches deal with housing developers it hopes will help fund cost of two new schools for Ely

The county council has brokered a deal with developers- including the Church Commissioners- to help pay for two schools needed for the 3,000 homes earmarked for Ely North.

It will mean the county council being paid from the sale proceeds of the homes should they sell for more than the amounts put forward in the original estimates.

Details will be presented to the county economy and environment committee on Tuesday and reflect months of negotiations by officers.

East Cambridgeshire District Council approved the first phase in March, with Endurance Estates set to build 1,300 homes and the Church Commissioners proposing to build 800 homes. A further 900 homes will be phased later on land owned by the Church Commissioners.

However both developers told the county council that a “viability exercise” had identified a potential gap between what they could afford and what they are required to pay.

A combined deficit was estimated at £13.5million, even allowing for a reduction in the percentage of affordable housing to 15 per cent from the district council’s normal requirement of 30 per cent.

Juliet Richardson, acting head of growth and infrastructure, said: “The greatest risk to the county council is the potential financial impact for the funding and delivery of the two primary schools.”

Bob Menzies, service director for strategy and growth, said the county council would receive money for the schools should sale prices exceed earlier expectations.

“We are fairly confident Ely is going to pick up in terms of value,” he said. “The science park and train frequencies to London coming through the pipeline mean this is a good risk to take.”

He said it was the first time the county council had put together a deal of this magnitude but there was a statutory obligation to provide school places even at a time when Government funding had been cut back.

Homes will be built in phases of 200 at a time and on the Church Commissioners land, for example, the school won’t be needed until the third phase.

Mr Menzies said it was important to create an environment in which homes could be built “but there is no point us asking for something if it is not viable. Land owners will simply say there is more money, for instance, in continuing to farm the land.”

The section 106 agreement if agreed refers to the county council having in place the “mechanism to capture the uplift in development value”.

The 106 agreement – a community benefits package- will also include an extension to Ely Country Park, play areas, community orchards and allotments, employment areas and improved transport.

East Cambridgeshire District Council is committed to getting the 3,000 homes under way to demonstrate it has made allowance for “a significant proportion of the housing supply” required of them by Government policies for growth.

Both schools for Ely North are expected to cost up to £25million for the pair with Endurance estates offering £3,158,794 for their part of the deal (as against the initial liability of £4.2million) and the Church Commissioners offering £4.48million against the original assessment of £9.8million.

Ms Richardson believes the Church Commissioners land has the potential to generate £11million through residential sales than previously estimated.

“Assuming that this level of uplift is achieved it will be more than sufficient to cover the shortfall in funding for the primary school,” she said. Any surplus will pay for “less urgent” section 106 items.