Developer of government-backed garden city says it is “struggling” to make 15,000-home scheme viable
One of the developers of the government-backed garden city development in Ebbsfeet has said it is “struggling” to make the 15,000-home scheme viable.
Duncan Bonfield, director of corporate communications at Land Securities, told a fringe event at the Conservative Party conference in Birmingham this week that the firm was “scratching our head, and we’re struggling to make [the Ebbsfleet development] work.”
Land Securities owns a large proportion of the site in Ebbsfleet, Kent, where the government has backed plans to build a 15,000-home garden city.
Chancellor George Osborne used the March budget to launch plans to build a garden city-style development in the Ebbsfleet quarry site held by Land Securities, LaFarge Tarmac and Redrow, which has long been stalled.
The government is putting through legislation to set up an urban development corporation in the area, with Osborne saying up to £200m of public funding could be made available to pump prime the scheme.
However, amid concerns that the scheme could require significantly more public funding in order to become viable, Bonfield told the event, organised by Localis, that: “This kind of development costs a lot of money. I can’t say how much exactly, but we’re in this for tens of millions of pounds already, maybe more, and we haven’t seen a penny of return yet.
“As Land Securities we could have invested this money in much more profitable returns so there has to be this recognition when we talk about large scale developments.”
Bonfield said the firm was committed to the scheme, for which the first 100 homes have now been built, but that the government had to be open to considering much more innovative funding options such as Tax Increment Financing and municipal bonds in order to make schemes of that scale work.
The government plans to have the Urban Development Corporation up and running by the end of the year, with Crossrail board member Michael Cassidy having been named chairman designate in August.