Bromley council faces losing £500k over Blue Circle site

PUBLISHED: 16:12 02 February 2011 | UPDATED: 16:34 02 February 2011

The first home at the former Blue Circle site is expected to be sold in May 2011

The first home at the former Blue Circle site is expected to be sold in May 2011

2010 AFP

More than £500,000 due to be paid to a council by a housing developer could be lost due to the economic downturn.

Asprey Homes agreed to give Bromley council up to £750,000 in return for building around 780 homes on the former site of the Blue Circle sports ground in Crown Lane, Bromley — but now it may only receive £200,000.

The ‘Joint Use Education Payment’ was to compensate for the extra demand the development would place on already over-subscribed schools and to pay for their potential 

But the agreement stated the money would only be paid if the house price index was at an acceptable profit level for Asprey and the current index shows it not been met since the last quarter of 2008.

Instead, Bromley council has been offered a one-off payment of £200,000 by the developer, despite it expecting to sell all of its homes.

The council’s development control committee is due to meet on Tuesday (8) evening to discuss whether to accept the offer. If it does, schools will potentially have to cope with hundreds of extra pupils but the council will receive less than a third of the money it expected to pay for them.

The report which was to be discussed by the council stated: “Members may wish to consider, on the basis of the historic price index, whether the agreed level of viability is likely to be achieved within three years of the sale of the first market dwelling.

“If the developer can demonstrate the non-viability of the scheme there is a risk that no joint education contribution may ultimately be payable. To date no monies have been paid.”

Under the agreement, Asprey would owe the council the full £750,000 if the house price index returns to a viable level within three years of selling its first unit, currently expected in May next year.

But if the index fails to reach that point, the company is not obliged to pay any of the education 

At a meeting last month, councillors said they already expected demand on resources to increase as people move to Bromley from inner London because of reductions in housing benefit payments.

Asprey Homes were unavailable for comment at the time of going to press.

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