New Report Says County Council Could Lose £12 Million in Land Sales as Credit Crunch Bites
PUBLISHED: 09:10 03 September 2008 | UPDATED: 10:32 04 May 2010
Up to £12 million could be lost by Cambridgeshire County Council in the next three years as the credit crunch hits the sale of council owned land and assets. In a report to be debated on Friday by councillors, Nick Dawe, director of finance, property an
Up to £12 million could be lost by Cambridgeshire County Council in the next three years as the "credit crunch" hits the sale of council owned land and assets.
In a report to be debated on Friday by councillors, Nick Dawe, director of finance, property and performance, details the probable losses to the council.
"The property market has slowed considerably and where sites can be sold, reductions in valuations from this time last year of 20 per cent are being seen," he says.
However, he says the property market is "patchy" and certain sites remain attractive to developers. A review of current and potential disposals is being undertaken to ensure that the right sites are bought forward at the right time."
"Several sales have not concluded as a result of withdrawal of interest by purchasers."
With the slow down in housing building, the county council is also gearing itself up to receive much less money from developers through the 106 planning gain system. Under this arrangement developers contribute towards local services and infrastructure but with fewer homes being developed, the council stands to lose out on £6 million in the next three years.
Pace of housing building has slowed and permissions for new developments "has almost tailed off entirely" says Mr Dawe.
"This has significant ramifications for the bringing forward of major developments and reaching the house building targets set by Government."
He also highlights concern over companies that do business with the council- mainly in the construction care and service sectors.
"Unexpected and immediate company collapse can place short-term strains on our services," says Mr Dawe.
And with fewer homes being built, the forecasts for council tax collection is also likely to be hit, he says.
"Decline in house completions and reduction in net migration into the county is likely to reduce tax base growth by a half," he concludes.
However the one bright spot is the council's "positive cash flow" and good management ensures the county is well able to mitigate some of the worst excesses of the economic downturn.