Future of eco-towns in doubt as funding is halved

Housing minister Grant Shapps wrote to local authorities last Friday to announce the funding cut for 2010/11. He is also demanding that developments provide evidence of local support for their plans before funding is released.

In February 2010, the government pledged £60 million for four projects confirmed in the first wave of eco-town locations. The money was to fund infrastructure and early ‘demonstrator’ projects such as exemplar homes. Local authorities in the second wave were promised £10 million to develop plans in March 2010 and put them through the planning system.

In his letter, seen by Inside Housing, Mr Shapps wrote: ‘I am reducing the awards payable in 2010/11 to authorities by 50 per cent. Awards will be subject to achievement of milestones, and completion of a value for money and sustainability audit on projects. Additionally I want to ensure that localism is a real feature of these schemes.’

The letter was sent privately to council leaders. No public announcement had been made on the cuts.

Meanwhile, the Communities and Local Government department last week announced that it was scrapping the proposed development at Middle Quinton in Warwickshire, which had faced fierce local opposition.

Developers behind the eco-town at Northstowe in Cambridgeshire are reviewing their options after the government placed funding on hold for a £1.1 billion road-widening project.

A CLG spokesperson said: ‘While there has been a 50 per cent cut in eco-town funding awards for 2010/11, this still provides a good level of start-up funding for these projects in the current circumstances.’

Paul Knowles, chair of Building Partnerships, which is promoting the Rackheath eco-town, said: ‘The need for new housing and growth to support local prosperity is essential if we are to provide people with a sustainable place to live and work.’

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