Council demands renegotiation of 'inappropriate, undeliverable, unaffordable' project
Liverpool Council is at the centre of a storm over a £170m regeneration scheme that has hit major problems.

A partnership including the council, Liverpool Housing Trust and developer Bishop Loch Homes had been planning since 2001 to replace 1500 defective "Boot houses" in the city's Norris Green area with a futuristic village of mixed-tenure homes.

But the council has now slammed the plans as "not appropriate, deliverable or affordable" and demanded they be renegotiated.

Executive member for housing Richard Kemp said there were a number of problems, including:

  • establishing the correct balance in the relationship between the council, other public sector bodies such as English Partnerships and private sector developers
  • a sharp increase in land prices; the site, originally valued at £10m, is now worth £35m and the council says it must protect its rising asset value
  • finding £10m to pay for the demolition of 1500 old-fashioned, prefabricated, "Boot houses".

The council is asking English Partnerships for help. Half have already been demolished.

LHT was to have received 680 of the 1700 new homes. Now, though, the council has rejected a £150,000 bill from LHT for preliminary work and declined to take its place in the joint venture.

Bishop Loch Homes is believed to be considering legal action.

Kemp said: "The concept we have agreed is still intact."

But he admitted regret over a six-month delay that will cause residents more problems as homes are demolished around them.

A plan thrashed out on Friday will see the first 250 homes built, 60 of them by LHT. The council will subsidise LHT's share by putting in the land value as the equivalent of local authority social housing grant: about £30,000 a home.

But questions remain over the other 1450 planned properties and the hundreds of tenants promised new homes.

LHT chief executive David Bebb said: "This is clearly a setback. Our primary concern is to make sure we provide the promised replacement housing for those displaced tenants who want to return to the [area]."

However, innovative features including "green" technology will have to be dropped.

The council's Labour opposition called for Kemp to resign after receiving a confidential report on the problems.

Housing spokeswoman Rose Bailey said: "The council has a moral obligation to deliver its promises to tenants who are living in hell on the estate.

"They have been promised new homes. But I question whether the concept was ever deliverable."

Kemp dismissed the calls for his resignation, saying the project was back on track.