Council's skill as housing developer questioned as cost of flagship scheme doubles to £77m in Milton Keynes

The saga of the town’s Agroa has dragged on for years after the the downtrodden 1970s building was purchased for £25m in 2019 by private developers with the view of building new homes.

The developers, London-based ‘profit-with-purpose’ developer TOWN and their partners Trivselhus, branded the project ‘Love Wolverton’ and vowed it would transform the town.

But two years later, with the site still untouched, they declared the scheme financially unviable due to rising construction costs and inflation.

MK City Council promptly stepped in to purchase the Agora from them with the aim of avoiding further delays. It is understood they paid around £10m.

The council promised to go ahead with building the planned 115 new homes, which include cohousing units for the over-50s, retail units, a pocket park and a bike hub.

TOWN were retained as ‘development managers’ and the new scheme would cost £36m, with a third of the homes classed as affordable, the council pledged.

They arranged for the Agora to be demolished, a process completed by early in 2023. However, since then the site has remained untouched.

In the meantime, the costs of borrowing the money to buy and develop it have rocketed with a doubling of interest rates. This means the total purchase and development cost has soared from £36.6 million in 2021 to £76.8 million today,

To make matters worse, opposition Tory councillors have accused the Labour administration of wasting public money and failing to deliver promises on a scheme that has remained “a pile of rubble” for the past two years.

This week Wolverton residents and business owners attended a Cabinet meeting of the council to discover exactly what was happening with the regeneration plan,

Labour blames the years of delays on “the changing economic climate and fundamental legislative changes to building safety regulations” and still insists the development is viable.

They said work on building the new homes should start next month and the frist residents could move in by 2028

But the latest plans have no mention of affordable housing and TOWN’s involvement has lessened, leaving the council as sole developer.

But Labour’s Cllr Lauren Townsend, deputy council leader and Cabinet member, is still optimistic. She said: “These plans will bring new homes, businesses and a fresh lease of life to the centre of this historic railway town...We finally have a viable plan and are in a position to sign off the works as soon as possible.”

The Conservatives are still far from happy though, and are branding the project “a £77m gamble” that is causing them serious concerns.

Tory leader Councillor Shazna Muzammil said: “Residents were promised regeneration, new homes and investment for Wolverton. Instead, they are being asked to accept a project that has faced significant delays, doubled in cost, lost its affordable housing and now relies on almost £60 million of borrowing to go ahead.

“Families across Milton Keynes are tightening their belts while council tax continues to rise. They expect the council to manage public money responsibly.”

Cllr Muzammil said the updated plans confirm the council will now directly build and sell a block of homes itself after TOWN was unable to secure private funding for Block C.

She said: “The Cabinet report acknowledges the council has limited experience developing homes for sale and highlights financial risks linked to borrowing costs, property sales and rental income assumptions.

“There are so many red flags in this report, and the financial risk is so high. The council itself recognises it has limited experience in developing and selling homes, yet it now intends to act as developer, landlord and seller.

“The benefit-to-cost ratio is just 1.114 That leaves very little room for error... If rents fall, homes do not sell, or construction is delayed, it will be Milton Keynes residents who carry the consequences.”