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Milton Keynes Council is set to abandon its plans to knock down and rebuild five of its estates as part of a £1bn regeneration project.
Cabinet member for housing and regeneration Nigel Long said in a statement that the authority “will move away from regeneration that could involve wholesale demolition”.
The minority-Labour administration will instead focus on “employment opportunities, improving skills and estate renewal”, with more targeted building work over longer periods.
Mr Long said that continued focus on estate demolitions and residents’ fears regarding the plans have been holding back its regeneration ambitions “for too long”.
It follows a similar high profile case in north London last year, in which Labour-controlled Haringey Council scrapped a £4bn regeneration programme involving Australian developer Lendlease.
Milton Keynes Council announced in April 2017 that it might demolish seven of its ageing estates: Netherfield, Coffee Hall, Tinkers Bridge, North Bradville, Fullers Slade, the Lakes and Beanhill.
It expected the work to take more than 15 years and involve razing 8,500 homes.
Plans to demolish the Lakes and Fullers Slade will still go ahead, as those schemes have progressed further.
The council is currently working on proposals for a different approach that specifically rejects wholesale demolition. There will be a consultation, following which the cabinet will decide in December what it will do.
Physical changes will be carried out more gradually, with an emphasis on improving existing stock and small-scale redevelopment, where approved by residents.
A new plan passed by the authority last month promised to review its existing regeneration strategy, with the seven estates considered a priority.
Mr Long said: “We are clear that we want to move forward with regeneration, but move to a focus on jobs, skills and better life chances.
“Yes, we will improve estates. Yes, we will build new houses. And yes, we will be spending £165m on improving our housing stock.
“But the clear and overwhelming message from residents is that if we want to change the conversation to other things, we need to be clear to people that wholesale demolition is not an option and regeneration is about more than bricks and mortar.
“We will be investing in both people and your estates, not destroying them.”
Last year, the council opted to strip regeneration vehicle Your MK of various powers, as a result of concerns about rifts with residents.
Your MK is a 50-50 partnership between the local authority and Mears Group that was set up in 2015 and was supposed to redevelop the estates.